Elon Musk hasn’t been sighted at the picket lines in Missouri, Ohio, or Michigan, where autoworkers are striking against the Big Three US carmakers. Yet the influence of Musk and his non-unionized company Tesla have been everywhere since the United Auto Workers called the strike last week. In some ways, Tesla—the world’s most valuable automaker by market capitalization—set the whole thing in motion.
Tesla’s pioneering electric vehicles kicked off a new era that has turned the entire auto industry on its head. In a scramble to compete with Tesla and make that transition, the legacy automakers targeted by the current strike, General Motors, Ford, and Stellantis, have each pledged billions in global investment and have begun dramatically restructuring their operations. For workers, the “green jobs” being created can be scarcer and worse paying.
Electric vehicle powertrains have many fewer moving parts than conventional gas-powered ones, and so they require 30 percent fewer vehicle assembly hours, according to one estimate. Plants that make EV batteries are generally outside the core, unionized auto supply chain. The United Auto Workers has seen a dramatic drop in membership due to jobs moving outside the US—it lost 45 percent of its members between 2001 and 2022. A future with more electric vehicles could mean fewer union jobs overall. “This strike is about electrification,” says Mark Barrott, an automotive analyst at the Michigan-based consultancy Plante Moran.
The new assembly plants that the legacy automakers need to pull off the transition have been stood up mostly in US states hostile to union organizing, such as Kentucky, Tennessee, and Alabama. And because many of these plants are joint ventures between automakers and foreign battery companies, they are not subject to previous union contracts.
The UAW did not respond to a request for comment, but UAW president Shawn Fain told CNBC last week that the electric transition can’t leave workers behind. “Workers deserve their share of equity in this economy,” he said.
Tesla’s rise over recent years has also put ever-ratcheting pressure on the legacy automakers to cut costs. Including benefits, Musk’s non-unionized EV company spends $45 per hour on labor, significantly less than the $63 per hour spent in the Big Three, according to industry analysts.
Musk’s willingness to upend auto manufacturing shibboleths has also forced his legacy competitors to seek new efficiencies. Tesla led the way in building large-scale car casts, stamping out very large metal components in one go rather than making a series of small casts that have to be joined together. And it pioneered an automotive chassis building process that can be easily adapted to produce different makes and models.
Tesla’s Silicon Valley roots also helped it become the first automaker to envision the car as a software-first, iPhone-like “platform” that can be modified via over-the-air updates. And the company aims to automate more of its factories, and extract more of the materials it needs to build its batteries itself.