Jan 11, 2024 - Business

Tesla and the UAW are careening toward a showdown over unionization

Illustration of a hand holding a strike protest sign with the cardboard cut in the shape of a car

Illustration: Annelise Capossela/Axios

Tesla and the United Auto Workers are laying the groundwork for a collision over whether the EV maker should be unionized.

Why it matters: After winning record contracts at General Motors, Ford and Stellantis, the UAW has Tesla in its sights — along with 12 other non-unionized automakers with operations in the U.S.

Driving the news: Tesla posted a flyer at its factory in Fremont, California, notifying "production associates, material handlers and quality inspectors" that they would be getting a "market adjustment pay increase," Bloomberg reported.

  • The company did not specify how much and did not respond to an Axios request for comment.

Context: Tesla joins a slew of other non-unionized automakers that have raised hourly wages following the UAW settlements, which led to average pay increases of 25% or more over the course of the 4.5-year deals.

Between the lines: The UAW has already begun informal organizing activities at Tesla, a person familiar with the matter tells Axios.

  • UAW president Shawn Fain has made it clear that he's itching to take on Tesla CEO Elon Musk after winning concessions from the Detroit Three automakers.
  • "While he's getting extremely wealthy off the backs of his workers and he's building rocket ships to fly his ass into outer space, workers continue to scrape to get by," Fain told the Detroit News in December.

The other side: Musk has repeatedly criticized the UAW over the years, citing the union's past corruption scandal.

  • "The UAW stole millions from workers, whereas Tesla has made many workers millionaires (via stock grants). Subtle, but important difference," he said on Twitter in 2021.
  • In November 2023, Musk said at the New York Times Dealbook Summit that "I disagree with the idea of unions" and that "if Tesla gets unionized, it'll be because we deserve it and we failed in some way."

Be smart: The UAW tried and failed to organize Tesla several years ago but believes that its chances have improved after workers see what the union got from Detroit.

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