Elon Musk: Traditional automakers like General Motors and Ford could go ‘bankrupt’ if…
Elon Musk has cautioned that if the United Auto Workers (UAW) union's demands for higher wages are met, traditional automakers like General Motors, Ford, and Stellantis could “drive GM, Ford and Chrysler bankrupt in the fast lane". The warning from the Tesla CEO comes amid a UAW strike against Detroit's Big Three automakers—GM, Ford, and Stellantis NV, the producers of Jeep, Chrysler, and Dodge vehicles. Patrick Kaser, a portfolio manager for Brandywine Global, also expressed similar concerns last week, suggesting that these companies could suffer significant competitive setbacks.
US President Joe Biden, however, showed solidarity with the UAW by supporting their call for wage increases during a visit to a GM plant. The UAW initially sought a 40% pay hike but has now moderated their expectations to a 36% increase. Meanwhile, pure electric vehicle companies like Tesla, Lucid Group and Rivian Automotive are not unionised, and they rely heavily on employee stock purchase plans and restricted stock units for compensation, Bloomberg reported.
The UAW is concerned that electric vehicles (EVs), which require fewer components and workers, will lead to job losses and decreased wages. Such fears have triggered attempts to unionise Tesla's workforce. Mint is now on WhatsApp Channels Subscribe today by clicking the link and stay updated with the latest financial insights! Click here! Though an attempt to organise Tesla's Fremont plant failed to gain sufficient traction, legal scholars like Catherine Fisk, a professor at UC Berkeley, believe that increased gains for UAW workers and high public support for unions might renew unionisation efforts at Tesla.
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