The ongoing UAW strike from the big three Detroit automakers continued to be a big topic of discussion for the markets and auto industry.
While no one knows exactly how long the strikes could last, some experts are pointing to Tesla Inc TSLA and its CEO Elon Musk as the winners no matter the length or the contract outcome.
What Happened: On Friday, the UAW began strikes at several automotive manufacturing facilities, after failing to reach a Thursday deadline with three automakers for contract negotiations.
The strikes and contracts are against General Motors Company GM, Ford Motor Company F and Stellantis NV STLA, known collectively as the Big Three.
While the Big Three automakers and auto suppliers could be under pressure the longer strikes and negotiations take, Tesla could become the big winner of strikes and expand its dominance in the electric vehicle sector, according to a new report from Politico.
Here are five ways Tesla can win from the strike and key items to watch.
Labor Costs to Rise for Auto Companies: The UAW demanded higher wages for its union workers at automotive companies. While the auto companies have pushed back on the amount demanded, it is likely that higher wages come in a new contract.
“Tesla’s competitive advantage over the Detroit Three is going to widen,” CFRA Research Vice President of Equity Research Garrett Nelson told Politico.
General Motors, Ford and Stellantis pay higher wages than Tesla and that gap could grow depending on the new contracts.
Relationship with White House: The White House and Musk have had a pretty distant relationship over the years, with President Joe Biden often failing to include Tesla or Musk in talks on electric vehicles.
The exclusion of Tesla often irritated Musk and came as Tesla is the dominant electric vehicle seller in the U.S.
Former White House secretary Jen Psaki was asked if Tesla being a non-union company was the reason the automaker was often excluded from White House events.
“Well, these are the three largest employers of the United Auto Workers, so I’ll let you draw your own conclusions,” Psaki said at the time.
The relationship with the White House has improved for Tesla with a deal signed to open charging stations from the EV company in exchange for access to federal money announced earlier this year.
By the end of the strike, Biden could find himself at odds with the UAW and could lean on a stronger relationship with Tesla and Musk.
Electric Vehicle Competition: The longer the strike goes on for the automakers, the larger the impact it could have on the three companies pushing out more electric vehicles.
Legacy automakers such as the Big Three have put forth plans to grow their electric vehicle production levels to take on leaders like Tesla.
Many automakers are currently losing money with their electric vehicle segments and need to scale up production and unit counts to bring their costs down and reach profitability. Higher wages and a drop in production time could lead to electric vehicles needing to be priced higher for Tesla competitors or larger losses taken if prices remain the same.
New Models Impacted: The length of the strike could also impact the rollout and marketing plans for new vehicle models from the Big Three automakers.
GM has the Chevrolet Blazer EV, Equinox EV and Silverado EV scheduled to launch later this year. Ford has the electric version of the popular Ford Explorer coming out next summer.
A prolonged strike or questions about higher wages and lower margins related to electric vehicles could impact the rollout plans of these new models.
Tesla Union Efforts: The UAW strikes at the Big Three could continue to highlight the fact that Musk has been vocally anti-union. Tesla does not have union workers and Musk has had several run-ins with the UAW over the years.
A federal appeals court once ruled Musk illegally intimidated workers who were considering organization with the UAW. The ruling has been appealed by Musk. The National Labor Relations Board filed a complaint related to software workers at a Tesla New York facility being fired after declaring their intent to unionize.
“We pay more than the UAW, but performance expectations are also higher,” Musk has said of his auto workers. “Quite a few factory techs who work on the line have become millionaires over the years from company stock grants.”
Musk said that his workers at factories “have a great vibe.”
UAW President Shawn Fain shared his criticism of Musk and Tesla in recent interviews.
“Competition is code word for race to the bottom, and I’m not concerned about Elon Musk building more rocket ships so he can fly in outer space and stuff,” Fain said.
There are concerns and opinions that the UAW could have Tesla in its eyes after taking on the Big Three. If workers at the Big Three get higher wages and benefits, the thought is that Tesla workers could be more incentivized to discuss unionization efforts.
Photos: Unsplash, Shutterstock
Image and article originally from www.benzinga.com. Read the original article here.