Tesla CEO Elon Musk issued a warning about the demands made by the United Auto Workers (UAW), stating that they could lead to bankruptcy for major automakers such as Ford, GM, and Chrysler owner Stellantis. Musk also appeared to criticize President Biden for supporting the union’s demands.
In a post on X, Musk expressed concern over the UAW’s request for a 40% pay raise and a 32-hour work week. He stated that these demands would inevitably drive GM, Ford, and Chrysler into bankruptcy at an accelerated pace.
Musk also voiced his opinion on the potential consequences of rising prices resulting from wage increases. He explained that increased prices would make cars unaffordable, leading to a significant drop in sales and ultimately bankruptcy for the automakers.
President Biden recently showed his support for striking auto workers in Michigan by joining them. He addressed the crowd and emphasized their right to a significant pay raise and other benefits.
When asked about the possibility of a 40% pay increase for workers, President Biden responded affirmatively, stating that they should be able to negotiate for it.
Tesla, as a nonunion auto maker, may benefit from the ongoing standoff between the UAW and its competitors. Wedbush analysts, including Dan Ives, have referred to this situation as a “growing nightmare” for companies like Ford and GM. These automakers are in the early stages of transitioning to electric vehicles, which will play a crucial role in their future success. Consequently, they now face increasing costs and complexities in the coming year.
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