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Us President supports strike and pay rise Musk: will go bankrupt

2024-02-24 Update From: AutoBeta autobeta NAV: AutoBeta > News >

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AutoBeta(AutoBeta.net)09/27 Report--

Musk stood up for the Detroit Big three?!

On Tuesday, local time, Musk, CEO of Tesla, publicly attacked the United Auto Workers (UAW) on Twitter, saying that the union's demands-a 40 per cent raise and a 32-hour week-would "push GM, Ford and Stelantis into the abyss and eventually go bankrupt."

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马斯克:工会40%的加薪要求将迫使三巨头破产

On September 26th, US President Joe Biden went to Michigan to take part in the strike. He wore the LOGO printed with the United Auto Workers (UAW) on his head, and he supported the strikers' request for a 40 per cent raise on the spot. Biden said that strikers deserve more. Workers who saved the auto industry in and before 2008 have made a lot of sacrifices. Now that they are living in a good situation, workers deserve higher pay and more pay. At the same time, Biden supported the strikers to "stick to it" and said they were "entitled to substantial pay increases and other benefits".

It is understood that UAW employees re-sign contracts with Detroit's "three auto giants" every four years, and the union's contract with Detroit's three auto giants expires on September 14. The union requires the three auto giants to raise wages, pensions, health care, unemployment and other security to deal with the cost of living crisis caused by high inflation in the United States, including a 40% pay increase and a four-day week, but within the deadline. The two sides did not agree on a new labor agreement and eventually launched a large-scale strike.

It is calculated that if the demand of the trade union is met, the labor costs of the car companies will increase by $45 billion to $80 billion, with an average labor cost of more than $80 billion per hour, an increase of 134% from the current $64. This means that the annual high labor costs will greatly weaken the market competitiveness of Detroit's "Big three", and even become its "unbearable" pressure.

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Jim Farley, Ford's chief executive, said UAW's proposal to raise wages by 40 per cent, shorten working hours and increase new pension benefits could bankrupt the company. He warned that if the UAW proposal had taken effect from 2019, the company would not have made $30 billion in four years, but would have lost about $15 billion and would now be bankrupt.

The general strike in the US auto industry shows no sign of abating. As of the 26th day, the strike in the US automobile industry has entered its 12th day. At present, there is still no obvious progress in the negotiations, and the strike is still continuing, which has posed a great threat to the US auto industry.

Ford has announced a moratorium on construction of a battery plant in Marshal, Michigan, according to the Detroit News. "until it is confirmed that the company can operate the Michigan plant in a competitive manner, the company will suspend work on the plant and limit its construction spending," Ford said. " However, Ford did not say whether a continuing strike by the UAW against Ford and its competitors in the city was a factor in suspending plant construction.

The continuing UAW strike has had an irreparable impact on the Detroit three, while electric carmakers, including Tesla, may be the beneficiaries of the strike because they are not unionized. It is understood that UAW also tried to organize Tesla workers to form a trade union, but failed. Musk once wrote on Twitter, "nothing can stop the Tesla team of our car factory from voting to form a union." They can do it now if they want. But why pay union dues and give up stock options? "

In addition to electric car companies, Hanri-German automakers can also benefit from protracted strikes, especially Japanese carmakers. It is understood that Japanese automakers have 1/3 of the market share in the United States, and the strike of UAW workers against the Big three in Detroit just makes up for the industry disadvantages brought about by its slow transformation of electric vehicles and the fading of the depreciation advantage of the yen.

Industry insiders believe that at present, the scope of the UAW targeted strike is still very limited, and the sales of Detroit automakers have not suffered a major blow, but if they do not reach an agreement on a new salary agreement, if the strike expands or continues, the US auto industry will suffer an unprecedented blow and affect the world.

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