Tesla CEO Elon Musk has issued a warning, expressing concerns that the demands of the United Auto Workers (UAW) may drive Ford, GM, and Stellantis (owner of Chrysler) into bankruptcy. In his statement posted on X, Musk also seemed to criticize President Biden for endorsing the union’s demands.
The UAW is currently pressing for a 40% pay raise and a 32-hour workweek. Musk argues that these demands would put GM, Ford, and Chrysler on a path to bankruptcy at an alarming speed.
Musk further contends that such wage increases would result in rising car prices, making vehicles unaffordable for consumers. This would inevitably lead to a significant drop in sales, which could ultimately lead to bankruptcy for automakers.
President Biden recently showed solidarity with striking auto workers in Michigan by joining them on the picket line. He voiced his support, stressing that workers deserve substantial pay raises and additional benefits.
When asked if workers should receive a 40% pay increase, President Biden confirmed his belief that they should have the ability to negotiate for such raises.
However, it is worth noting that Tesla, a nonunion auto manufacturer, stands to benefit from the ongoing standoff between the UAW and its competitors. Wedbush analysts, including Dan Ives, described this situation as a “growing nightmare” for Ford and GM, as they are in the early stages of transitioning to electric vehicles. This transformation will significantly impact their future success. In contrast, Tesla faces fewer complications and costs as it continues on its electric vehicle path.
It is evident that this dispute between the UAW and automakers will have substantial consequences for the industry moving forward. Ford and GM will need to navigate mounting challenges and expenses in the coming year.