The UAW is going to help Tesla further trounce its competition by significantly ramping up labor costs at the Big Three. A few metrics:
Tesla makes 5 times the profit per vehicle of Toyota (who runs circles around the Big Three).
Tesla makes more profit than GM and Ford's combined.
Musk must be doing backflips. Maybe a good time to short GM, Ford, and Stellantis.
The walkouts mark the first time in history that the UAW has struck against all 3 of America’s unionized automakers simultaneously. The action comes after the union’s demands for more pay, reduced working hours, cost-of-living adjustments, and a return to previous pension provisions were dismissed by the big three. The latest demand, a 36% pay rise, suggests that the two negotiating sides remain far apart on major issues.
Going electric
Although it's not the main factor at play, the switch to electrification is an important part of the discussions. Tesla’s workforce, for example, is not unionized — and there’s growing concern that, because EVs require fewer parts than their combustion engine counterparts, they may require fewer assembly workers in the future.
Interestingly, the data suggests that Tesla isn’t (yet) as labor efficient as its peers. Tesla’s rapid growth saw it deliver 1.3 million vehicles last year — roughly 10 deliveries for every Tesla employee. Jeep-and-Chrysler-owner Stellantis delivered 22 cars per employee, Ford managed 24.5, and GM delivered nearly 6 million vehicles with a workforce of ~167,000, or 35 deliveries per employee.
Comments