A general strike in the U.S. auto industry may intensify. On Tuesday, September 26, Eastern Time, while visiting a General Motors factory in the suburbs of Detroit, U.S. President Biden expressed support for the United Auto Workers (UAW)'s request for a substantial wage increase. He said that workers saved the automobile industry as early as 2008 and before and made a lot of sacrifices. At that time, automobile companies were in trouble. Now they are in a good situation, so workers should be well treated and their income should be much more than what they get now.
Biden told striking workers to "hang in there," and that you are entitled to big pay raises and other benefits. The UAW had previously lowered its requested wage increase to 36% in labor negotiations. When asked on Tuesday whether he agreed with the UAW's push for a 40% wage increase at auto companies, Biden answered "yes."
Tesla CEO Musk has since warned that the three major automakers will soon face bankruptcy if the UAW's requirements are met. Musk posted on X, the social media formerly known as Twitter:
A 40% wage increase and a 32-hour work week would "certainly push GM, Ford and Chrysler onto the fast track to bankruptcy."
Wall Street News once mentioned that on September 15, the UAW launched a strike against the three giants - General Motors, Ford and Stellantis. This was the first time in the history of the UAW to target the three major auto companies at the same time, and it was also one of the strongest strikes in the United States in recent years.
The first three factories to participate in the strike account for 9% of North American automobile production, with about 13,000 workers participating. The three car companies have laid off about 3,000 people in total. Last Friday, the UAW announced that it would expand the scope of strikes at GM and Stellantis factories, adding 38 factories under the two companies to strike. Ford's strike is still limited to one factory.
Some comments say that the strike is one of the UAW's attempts to protect workers' interests during the automotive industry's transition to clean energy. What the strike is really opposed to is "new technology harvesting" because the transition to electric vehicles may eliminate many jobs and significantly change or relocate other jobs. It is estimated that the electric transformation may lead to the loss of 35,000 automotive jobs.
When UAW Chairman Shawn Fain rejected Stellantis's 21% salary increase plan on September 17, he emphasized that the transition to electric vehicles must be a just transition. If the U.S. government wants to use taxes to fund the policy, American workers cannot be left behind.
And because the most successful new players in electric vehicles, such as Tesla, have not formed unions. Regardless of the outcome of the strike, Tesla CEO Musk has already won. The "Big Three" will certainly spend more money, and any raise will further enhance Tesla's huge cost advantage in electric vehicles.
However, some experts believe that the strike will also affect Tesla. The UAW's ability to secure higher wages could put pressure on Tesla as it works to reunion.