(CTN News) – In addition to the already historic strikes the United Auto Workers union waged against Detroit’s three automakers – General Motors (GM) – Get Free Report, Ford (F) – Get Free Report and Stellantis (STLA) – Get Free Report – President Joe Biden walked the picket lines with striking workers on September 26th, adding an additional layer of precedent to the strikes.
As of September 15, the union has begun a series of rolling strikes against all three automakers. It should be noted that these strikes have been expanded to include all parts distribution facilities owned by GM and Stellantis as of Sept. 22.
Due to the company’s willingness to work at the bargaining table, Ford was skipped over as part of the expansion due to its willingness to negotiate.
According to the union, they are seeking salary increases of 40%, as well as a 32-hour work week, cost-of-living adjustments, and the expansion of their benefits.
It has been reported that the automakers have offered 20% increases over a four-year period, but have been largely inflexible on the other demands.
In addition to telling the striking auto workers that they “deserve the significant raise you need,” Biden, when asked if members do indeed deserve the 40% raise that they are seeking, replied: “Yes.”.
The economists have estimated that the strikes could have a huge impact on the U.S. economy, costing the country around $5 billion over the course of 10 days, an amount that is expected to rise the longer the strikes continue.
Meanwhile, analysts are noting that regardless of the details of a possible deal that will eventually be reached, Tesla (TSLA) is likely to come out on top of this situation.
Wedbush analyst Dan Ives said earlier in September that while Detroit’s stalwarts are fighting with the UAW, a bottle of champagne is being iced at Tesla headquarters, according to a report from Wedbush.
Elon Musk, the chief executive of Tesla, seems to share the same viewpoint.
Musk wrote in a post on X, the social media platform he purchased last year, that employees wanted a 40% pay increase and a 32-hour workweek. It is a sure way to drive GM, Ford, and Chrysler out of business.
Tesla, whose workers are not unionized, was found to have illegally terminated an employee who attempted to organize unionization efforts in March by a federal appeals court. Additionally, the court found that Musk, a vocal opponent of unions, had illegally threatened workers’ stock options.
According to Deepwater Asset Management managing partner Gene Munster, “While the Big Three will be forced to pay more for labor, they cannot afford to do so.”
As a result, Tesla will be able to maintain low prices for the next two to three years, resulting in negative margins for the Big Three.