Tesla CEO Elon Musk lashed out at the United Auto Workers (UAW) on Tuesday, saying the union's demands would "put General Motors, Ford and Chrysler on the fast track to bankruptcy." Currently, the UAW is launching a rare strike against Detroit's three major auto giants - Ford, General Motors and Stellantis NV. The strike has lasted for nearly two weeks.
Although the union has lowered its wage increase demand from 40% to 36%, the differences between labor and management are still difficult to resolve. The union also demands a 32-hour work week and improved benefits.
Earlier on Tuesday, U.S. President Joe Biden expressed support for the UAW's demands for significant wage increases while touring the front lines of a strike at a General Motors plant in suburban Detroit.
Tesla and other pure electric car companies such as Lucid and Rivian are not unionized. They often use restricted stock and employee stock purchase plans as a large portion of total compensation.
The UAW also tried to organize Tesla workers to form a union, but failed. Musk once wrote on Twitter, "Nothing is stopping the Tesla team at our auto plants from voting to unionize. They can do so now if they want. But why pay union dues and give up stock options?"
Musk isn't the only one who thinks the UAW's demands will spell trouble for the Detroit automaker.
"If the UAW gets everything they ask for, it will obviously seriously damage the competitiveness of the three major auto companies," Patrick Kaser, a portfolio manager at investment management firm Brandywine Global, said in an interview last week.
Ford CEO Jim Farley has said reluctantly that the company may face bankruptcy if the union plan is implemented.
At the same time, some analysts pointed out that regardless of the details of the final agreement, the real winner in this strike is Tesla.
The strike will also have a huge impact on the U.S. economy. Some economists predict that the United States will lose about $5 billion during a 10-day strike, and the longer the strike lasts, the higher the loss will be.