UAW push to organize Tesla (TSLA) and non-union auto sector

November 29, 2023 4:22 PM EST

The United Auto Workers (UAW) union announced Wednesday their plan to unionize electric vehicle maker, Tesla (NASDAQ: TSLA) as well as the entirety of the nonunion auto industry in the United States.

This move follows the union’s successful negotiation of new contracts with the Detroit Three automakers.

UAW revealed that employees from 13 nonunion automakers have launched coordinated campaigns nationwide to join the union.

These efforts encompass companies such as Tesla, Toyota (NYSE: TM), Volkswagen, Hyundai, Rivian (NASDSAQ: RIVN), Nissan, BMW, and Mercedes-Benz.

The combined U.S. assembly plants of these automakers employ nearly 150,000 workers, a figure comparable to the workforce of the Detroit Three companies, where the UAW recently finalized new labor agreements, according to the union's statement.

"To all the auto workers out there working without the benefits of a union, now it's your turn," UAW President Shawn Fain said in a video.

"The money is there. The time is right," he added.

The agreements between the UAW and General Motors (NYSE: GM), Ford Motor (NYSE: F), and Stellantis (NYSE: STLAM) included a 25% raise in base wages until 2028, a reduction in the duration to reach top pay from eight years to three years, a 150% increase in pay for temporary workers, and their transition into permanent employees.

According to the Union’s organizing strategy, if 30% of workers at a nonunion plant sign cards seeking to join, the union will make it public. Should 50% of the workers express interest in joining, the UAW plans to host a rally alongside Fain to highlight and support this initiative.

Upon reaching a 70% threshold, coupled with the establishment of an organizing committee, the UAW intends to pursue formal recognition or request a union representation vote.

The push comes as a number of foreign automakers announced significant wage increases, as well as other compensations. A response widely perceived by analysts and industry officials as an attempt to dissuade the UAW from entering their plants.

Shares of TSLA and RIVN closed down 1.05% and 0.57% on Wednesday.

Shares of TM closed up 1.26%.

By Michael Elkins | [email protected]

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