Saturday, September 30, 2023

Tesla is the big beneficiary of the strike by workers at Ford, General Motors and Stellantis

Last Friday, the powerful United Auto Workers (UAW) union launched. a strike at three auto factories in the United States. A strike affecting the three major Detroit manufacturers: General Motors, Ford and Stellantis and which could further strengthen Tesla’s already solid position in terms of sales.

The aim of this strike is to improve the economic and working conditions of workers in America’s major corporations. The union demands a 36% salary increase in four years while the three American manufacturers did not exceed 20%.

This situation may lead to an increase in the production costs of large traditional corporations This also applies to the difference to Tesla. And data from the Münster consulting firm suggests that workers in… Ford, General Motor and Stellantis earn 38% more than Tesla. A difference that everything points to will increase with the signing of the agreement.

According to the Munster report: “Major car manufacturers are in a difficult situation when switching to electric cars and the current discussions with the unions will ultimately lead to a sharp increase in costs that will push them further into the red.»

For his part, Dan Levy, analyst at the consulting firm Wedbush: “To be clear: This is a potentially nightmare situation for GM and Ford, as they are both in the early stages of a massive electric vehicle transformation over the next decade that will determine future success.«.

The situation is not easy, and to reduce costs, manufacturers need to scale their production. Something that a strike won’t help in the slightest. In addition, there is the foreseeable increase in costs after the agreement has been concluded with the unions, which in the best case will be around a 20% salary increase.

For example, Tesla’s labor costs are currently estimated at about $45 to $50 per hour while the Detroit giants do it in between $64 to $67 per hour. Both figures include salaries, social benefits and profit sharing.

A scenario in which major manufacturers are faced with a Tesla going full speed ahead, increasing production and reducing costs, for example through the use of Gigapresa what allows them lower costs. This has implications for ever-lower prices and ever-increasing market share, which in the case of the United States already reaches a staggering 60% of the Tesla market.

Nation World News Desk
Nation World News Desk
Nation World News is the fastest emerging news website covering all the latest news, world’s top stories, science news entertainment sports cricket’s latest discoveries, new technology gadgets, politics news, and more.
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