UAW strike has an unexpected winner: Elon Musk

The United Auto Workers strike against the Detroit automakers—Ford, General Motors and Stellantis—which saw 13,000 UAW union workers walk off their jobs early Friday, has an unexpected winner: Elon Musk.

Musk non-unionized workers make anywhere between $23 and $67 an hour, and some workers also get cash and Tesla stock options, among other benefits. The average cost of labor and GM, Ford and Stelantis is estimated to be $66 per hour.

If the Big Three automakers agree to the UAW union’s terms of a 40% pay hike, among other benefits, Wells Fargo predicts the labor cost of the Detroit Three would jump to $136 an hour.

Saving is earning
It is due to the low labor costs at Tesla that the company has been slashing the prices of its electric vehicles. Even with the price cuts, the automaker reported a 20% profit in its second quarter. With the federal tax credits offered for EV purchases and several charging stations made available in America, analysts say customers would prefer Tesla the most.

Musk can further reduce the Tesla EV costs and still reap profits from sales, provided his workers don’t follow in the UAW’s footsteps.

UAW and Tesla workers
Previous efforts by the UAW to get Tesla workers to organize failed in 2017 and 2018. One of the reasons could be that employees get company stocks.

Tesla shares have been performing well. Musk once noted that “quite a few” line workers have become “millionaires over the years from company stock grants.”