Tesla CEO Elon Musk invited the United Auto Workers to hold a union vote at the Tesla factory, stating that Tesla “will do nothing to stop” the voting process.
It’s the latest in a years-long saga between the UAW and Tesla, in which Tesla has been found to violate labor law in unfairly cracking down on union organization.
Tesla’s workforce is non-union, unlike the “Big Three” American automakers – GM, Ford and Chrysler (now part of Stellantis). But Tesla’s main plant in Fremont, California was previously the “NUMMI” plant, a joint venture between GM and Toyota which used UAW union labor.
The UAW has wanted to unionize Tesla for some time now, particularly given the plant’s union past. There was a significant push from UAW in 2017-2018, but union efforts have not gotten particularly far as of yet.
Today’s invitation from Musk seems like a change in tune, but he has made similar invitations before. In 2018, he said that Tesla employees could “vote union tomorrow if they wanted,” but that this would result in them needing to give up stock options and pay union dues for “nothing.”
This communication was found to violate US labor law, and the National Labor Relations Board ordered Musk to delete it. They also ordered Tesla to offer compensation for lost wages to a union organizer, Richard Ortiz, who the company illegally fired. A federal judge noted 12 company actions that violated US labor law.
More recently, Tesla has come under fire from California’s Department of Fair Employment and Housing for alleged systemic mistreatment of factory employees, and last year was ordered to pay a $137 million judgment to an ex-worker due to a pattern of racial abuse he experienced when working there. In each of these cases, management was found unreceptive to concerns by the individual employees in question – whereas a union representative might have offered a second chance for those concerns to be heard.
Musk suggested today that the real reason unionization efforts have not gotten far is due to high levels of employee compensation by Tesla – a natural outgrowth of the hot job market in the San Francisco Bay Area:
Our real challenge is Bay Area has negative unemployment, so if we don’t treat and compensate our (awesome) people well, they have many other offers and will just leave!
I’d like hereby to invite UAW to hold a union vote at their convenience. Tesla will do nothing to stop them.
Musk also claimed that “Tesla factory compensation is the highest in the industry.” His source for this statement is an Andrew Sorkin interview with GM CEO Mary Barra, where Sorkin states “it appears by my math that, on average, Tesla employees, who are non-unionized … on an hourly basis may be making more money than unionized workers at GM.” Barra disagreed with this analysis, saying “my last look at that, that was not the case.”
Tesla’s high pay largely comes from their stock compensation program, which offers stock options to most employees, as is common in Silicon Valley. The rise of TSLA stock has made those options very valuable, which means total compensation for Tesla workers will be buoyed by a high TSLA stock price – which is relevant to the aforementioned threat to remove options from union employees.
Unionization efforts at are ongoing at Tesla facilities outside of the US as well. IG Metall, the largest union in Germany, is trying to organize workers at Tesla’s Gigafactory Berlin. Germany has relatively high labor organization rate, with about half of the total workforce covered by some sort of collective bargaining agreement. In the US, only about a tenth of workers work under a collective bargaining agreement.
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