Tesla, the electric car giant, has informed its workforce at the California plant about pay increases happening across its U.S. factories. The move comes in the wake of a broader trend among nonunion automakers responding to the United Auto Workers’ (UAW) ongoing efforts to organize.
New Year, New Pay: Market Adjustment for All U.S. Production Roles
A notice posted at Tesla’s Fremont, California facility outlined a “market adjustment pay increase” for all U.S. production associates, material handlers, and quality inspectors. However, the specifics of the raise were not disclosed in the document viewed by Bloomberg News, and inquiries to Tesla’s senior director of human resources went unanswered.
Following the footsteps of companies like Toyota, Volkswagen, and Hyundai, Tesla joins the wave of pay hikes at U.S. plants. This comes after the UAW successfully secured landmark labor contracts in the previous year for workers at Ford, General Motors, and Stellantis. Capitalizing on this success, the UAW is now actively organizing efforts targeting Tesla and a dozen other manufacturers, aiming to double its membership within the automotive industry.
While previous attempts to unionize staff at major car companies faced rejection or never reached a vote, the UAW President, Shawn Fain, attributes past failures to corruption, close ties with management, and unfavorable contracts. Buoyed by the outcomes of strikes at major automakers, Fain expresses confidence, stating that the union “can beat anybody.”
Tesla CEO Elon Musk, a long-time critic of the UAW and unions in general, has emphasized cost-cutting measures. He argues that rising interest rates offset the impact of repeated price cuts, making electric vehicles less accessible to many consumers. The recent salary boost for production workers adds complexity to what Musk referred to as the “game of pennies” in Tesla’s last earnings call. With approximately 140,000 global employees, half of whom are in the U.S., the increase affects a significant portion of the workforce.
Tesla’s Fremont factory, with over 20,000 employees, has seen the formation of a UAW organizing committee. The union is committed to providing necessary resources for the campaign, as revealed by an insider last year. Notably, in 2021, the National Labor Relations Board ruled that Tesla violated labor laws during prior UAW organizing efforts. Allegations included firing an activist and implying that joining the union would impact workers’ stock options. Tesla has denied wrongdoing and is currently appealing the ruling in federal court.