Tesla
CEO Elon Musk warned that the United Auto Workers’ demands could drive
Ford,
GM
and Chrysler owner
Stellantis
to bankruptcy, as he appeared to criticize President Biden for joining the picket line.
“They want a 40% pay raise and a 32 hour work week. Sure fire way to drive GM, Ford and Chrysler bankrupt in the fast lane,” Musk said in a post on X, responding to news that Biden backed the union’s demands.
In a separate post, he said rising prices as a result of wage increases “makes cars unaffordable, which leads to major sales drop, which leads to bankruptcy.”
Biden joined striking auto workers in Michigan Tuesday, grabbing the megaphone and addressing the crowd at one point. “Folks, stick with it, because you deserve the significant raise you need and other benefits.”
When later asked if workers should get a 40% pay increase, he said “yes, I think they should be able to bargain for that,” according to remarks released by the White House.
Tesla (ticker: TSLA), a nonunion auto maker, is a potential winner from the continuing standoff embroiling three of its competitors. Wedbush analysts Dan Ives described the dispute as a “growing nightmare situation” for Ford (F) and GM (GM) earlier this month, as both are at the early stages of an electric-vehicle transformation path “that will define future success.” He added that Tesla’s competitors now face mounting costs and complexities in the year ahead.
Write to Callum Keown at callum.keown@barrons.com
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