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Beege touched on this yesterday but I wanted to highlight it a bit more. As of today, the UAW has announced what they’re calling a standing strike, meaning they are just striking in three factories.
Since no deal was reached before the 11:59 pm ET deadline Thursday in contract negotiations with the Big Three automakers, the United Auto Workers union launched a targeted “stand up” strike at just three auto plants initially.
For UAW members at all other plants, however, they will continue to go to work unless and until they, too, are called to strike. But they now will be working without a contract.
CNN has published a story saying a big winner of the strike is Tesla. Tesla is not a union shop which means it is in no danger of a strike or of being forced to have to pay workers 40% more for the same job. But beyond that, almost everything CNN reports here is wrong:
Tesla faces growing electric vehicle competition, and rival automakers are challenging its position as the EV market leader. Tesla gained the crown by beating competitors to market by literally years. But industry analysts believed Tesla would ultimately be bested by legacy automakers that could make much cheaper EVs.
However, Detroit’s cost advantage could erode if it makes significant concessions to the United Autoworkers Union, said Dan Ives, analyst at Wedbush Securities. And a prolonged strike could delay the timing of GM, Ford and Stellantis’ EVs coming to market.
“A strike lasting longer than 4 weeks would be a body blow to the EV ambitions of GM and Ford in [the first half of 2024] and delay many aspects of this initial important EV push,” Ives said. “The clear winner in this Game of Thrones Battle between the UAW vs. GM/Ford is Tesla, which sits in a nonunion position.”…
“Lets be clear: This is a potential nightmare situation for GM and Ford,” Ives added.
The reality is that “analysts” have been saying for years that the competition was coming to eat Tesla’s lunch but the reality is that most non-Tesla EVs aren’t selling that well. As for the idea that the rival automakers have a cost advantage over Tesla, that is a complete fantasy. At least when it comes to GM and Ford, they are having to build up their EV lines from scratch at a cost of billions of dollars. Ford has been pretty transparent about the fact that even with the few EV models that are selling, they are losing a lot of money on every car sold.
The recent release of Ford’s second-quarter financial results for 2023 provided fresh information about the company’s electrification plan, the costs associated with it and the company’s updated long-term plans.
