Tesla (TSLA) -) shares were active in early Friday trading as investors indicate the clean-energy-car maker could benefit from a prolonged strike at upstart EV rivals Ford (F) -) and General Motors (GM) -).
Tesla, a nonunion employer, could see both a market-share boost as well as a price-advantage discount if the United Auto Workers' Union strike, which kicked off last night, extends into October and beyond, according to Wall Street analysts.
Consulting group J.D. Power has estimated that new-car prices could rise around 2% if the strike were to last two weeks, with corresponding increases in the used car market as well.
That could provide a key advantage for Tesla, which has been cutting prices in key markets worldwide, including the U.S., in order to win market share and boost the value of its tertiary revenue ambitions linked to the licensing of full self-driving technologies.
UAW's demands and concerns behind strike
The UAW, alongside demands for a 40% pay increase spread over 4 1/2 years, has also expressed concerns that its members get paid far less for working at joint ventures with Big Three companies making EVs and components than those working on legacy assembly lines.
A prolonged strike, according to Wedbush analyst Dan Ives, could disrupt the EV production schedules of both Ford and GM, pushing their plans out to 2024 and beyond, in what he described a 'crucial period' for the Detroit Three.
"This is a potential nightmare situation for GM and Ford as both 313 stalwarts are in the early stages of a massive EV transformation path for the next decade that will define future success," Ives said.
"On the other hand nonunion Tesla does not face similar issues which speaks to the complexity both GM and Ford face going up against the EV leader."
"While the Detroit stalwarts battle with the UAW, there's a bottle of champagne that's being iced at Tesla headquarters," he added.
Tesla shares were marked 0.4% lower in mid-day Friday trading and changing hands at $274.82 each, a move that still leaves the stock up nearly 20% over the past month.
Tesla CEO Musk has pushed back on unions
Tesla CEO Elon Musk has actively and aggressively pushed back on union activity in the company's U.S. factories, and was deemed by a federal court in March to have illegally fired an employee, Richard Ortiz, who was involved in organizing a nascent Tesla union.
The carmaker is also locked in a dispute with the National Labor Relations Board, as well as the UAW, over a company rule that forbids workers from wearing t-shirts that display pro-union messages.
Musk has also suggested unionized workers could lose their Tesla stock options.
"Tesla and SpaceX factories have a great vibe. We encourage playing music and having some fun," Musk wrote on the X social-media website, which he purchased last year for $44 billion. "Very important for people to look forward to coming to work!"
"We pay more than the UAW btw, but performance expectations are also higher," he added. "Quite a few of our factory techs who work on the line have become millionaires over the years from company stock grants."
Discrepancy in salary estimates at Tesla vs. UAW
Despite Musk's insistence, analyst suggest Tesla workers earn around $45 an hour in wages and benefits, compared with an average of around $65 per share for UAW members.
The UAW targeted all three of the main U.S. automakers for strike action for the first time in the union's history, unveiling the plans around two hours before the end of a four-year contract at midnight U.S. Eastern on Thursday.
The 146,000 members of the UAW had had originally backed a 46% pay increase, spread over the next 4 1/2 years, before retreating to a demand of around 40%. That, however, still falls well ahead of the 20% increase offered earlier this week by Ford. GM's offer was also pegged at 20% and Jeep-Chrysler owner Stellantis STLA at 17.5%.
The UAW is also seeking a reduced 32 hour work week, the removal of pay-level tiers and a a return to cost-of-living adjustment payments linked to inflation.
Around 12,700 workers will picket assembly sites around the mid-west, including Ford's plant Wayne, Mich., a GM facility in Wentzville, Mo., and a Jeep plant, owned by Stellantis (STLA) -), in Toledo, Ohio.
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