Wed. Oct 4th, 2023
    Tesla Continues Vehicle Production as Auto Strike Drags On

    The United Auto Workers’ (UAW) strike against Ford, General Motors (GM), and Stellantis continues, causing production delays. Meanwhile, Tesla announced that it has produced its 5 millionth vehicle, highlighting the nonunion automaker’s ability to continue operations while its top rivals face uncertainty.

    As negotiations for new labor contracts between the UAW and the three major automakers continue, the strike is expected to persist and negatively impact production. This ongoing strike could potentially benefit Tesla and other nonunion automakers like Toyota and Honda.

    Nelson Lichtenstein, a history professor at the University of California, Santa Barbara, believes that the auto strike will intensify with each round of negotiations and predicts it may last for about a month. He also suggests that the Biden Administration may need to exert pressure on the companies to reach a resolution.

    The strike has already led to the shutdown of GM, Stellantis, and Ford plants, impacting the production of high-value trucks and SUVs. Ford has also laid off 600 nonstriking employees at one of its plants. The negotiations between the UAW and the automakers have been contentious, with the two sides remaining far apart on new labor deals.

    Stellantis recently increased its offer, proposing pay raises of 20% over a four-and-a-half-year contract term, including an immediate 10% hike. However, this offer falls short of the approximately 40% hourly pay increase demanded by the UAW. The union recently reduced its pay raise request to the mid-30% range. The UAW has a strike fund of $825 million and increased strike pay, which gives its members the financial means to withstand a longer strike.

    The ongoing strike has had an impact on auto stocks, with GM, Ford, and Stellantis experiencing fluctuations in their stock prices. In contrast, Tesla has been unaffected and continues to thrive in the EV market. Analysts predict that Tesla will be the clear winner in this situation, as its competition faces production shutdowns. Non-U.S. automakers may also benefit from a rising auto price environment and a widening labor cost advantage.

    As the strike continues, the fate of the negotiations remains uncertain. The consequences of an extended strike could be significant, impacting the profitability of GM and Ford. In the meantime, Tesla remains a formidable competitor, producing vehicles and expanding its market share in the EV industry.

    Sources:
    – Source 1: Investors.com – “Tesla Shares Set Up For Key Buy Point” by Mike Juang
    – Source 2: Original article: “Auto Strike News: UAW Walkout Vs. Ford, GM, Stellantis Continues” by IRIS SMITH