Tesla’s latest decision is a critical defensive move against the UAW

Tesla  (TSLA) – Get Free Report is the latest non-union automotive manufacturer to feel the ripple effects of United Auto Workers’ (UAW) recent labor victories. 

Production associates work on a Tesla Model 3 at the Tesla factory in Fremont, California.

San Francisco Chronicle/Hearst Newspapers via Getty Images/Getty Images

As per a report published by Bloomberg on January 11, Tesla notified workers at its Fremont, Calif. assembly plant of pay increases across its factories in the United States. 

The report, which cited a flyer posted at the facility, stated that all United States-based production associates, material handlers and quality inspectors will be receiving what Tesla calls a “market adjustment pay increase.” However, the flyer did not state any hard numbers of how much said increase will actually be. 

The prolific electric vehicle manufacturer is the latest amongst a growing list of non-union foreign and domestic automotive manufacturers — which include the likes of Toyota, Honda and Volkswagen — in increasing factory employee pay at its stateside plants amidst the landmark agreement with Detroit’s Big Three automakers Ford  (F) – Get Free Report, General Motors  (GM) – Get Free Report and Stellantis  (STLA) – Get Free Report.

UAW President Shawn Fain greets members attending a rally in Chicago, Illinois.

Jim Vondruska/Getty Images

UAW President Shawn Fain has had Tesla and other non-union car manufacturers in its crosshairs since the historic decision. In an October statement, Fain called workers at Tesla, Toyota, Honda and other non-union manufacturers “the UAW members of the future.”

Tesla CEO Elon Musk has been notoriously anti-union and is especially critical of the UAW. Amongst other incendiary comments he made during his infamous talk at The New York Times’ DealBook Summit in November 2023, he noted that the scenario of Tesla becoming unionized would be the reflection of a company failure.

“I disagree with the idea of unions,” Musk said. “If Tesla is unionized, it’ll be because we deserve it and we failed in some way.”

Related: Biden aims to give a big boost to electric vehicle market with latest move

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Tesla has been in a dispute with labor union IF Metall in Sweden since Oct. 27. The group has been seeking a collective agreement for mechanics working in the EV brand’s service centers in the country. While its strike progressed, solidarity actions by unions across Scandinavia have taken action against the EV manufacturer in support of the Swedish union.

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