Workers shouldn't accept lower wages so ‘greedy people like Elon Musk can build more rocket ships,' says UAW president Shawn Fain

Workers in companies like Tesla “are scraping to get by so that greedy CEOs and greedy people like Elon Musk can build more rocket ships,” United Auto Workers president Shawn Fain said on CBS’s Face the Nation program Sunday.

In statements outlining their position, Ford Motor, General Motors and Stellantis—collectively known as the “Big Three”—have warned that the union’s demands would worsen the already-existing cost gap with other car companies with non-unionized workforces.

On Thursday, Ford said that meeting the UAW’s demands would double its labor costs, already “significantly higher than the labor costs of Tesla, Toyota and other foreign-owned automakers in the United States that utilize non-union-represented labor.”

Responding to these concerns, Fain claimed on CBS that labor costs made up just 5% of a vehicle’s cost. “[Automakers] could double our wages and not raise the price of the vehicles and still make billions in profits,” he said. The union president called wages at Tesla and other companies “pitiful.” 

Representative Debbie Dingell (D-Mich.), whose district covers part of the Detroit area, echoed these concerns on CBS. “Tesla does have a huge discrepancy in what they’re paying their employees. And most people in this country can’t afford a Tesla,” she said, referring to the car’s high price. 

But Dingell suggested that a win for the UAW could help non-unionized workers too. “Almost all workers at auto plants benefit from where these negotiations go,” she said. 

What are auto workers demanding?

The UAW started a targeted strike on Friday, walking out of three plants in Missouri, Ohio and Michigan. The union has suggested that starting small will allow most of its members to keep working, while preserving room for further escalation.

Negotiations between the union and the Big Three restarted over the weekend. The UAW said it had “reasonably productive discussions” with Ford on Saturday. 

Ford said it was committed to reaching a deal with the union in a statement to Reuters on Saturday. 

Still, the union and the automakers appear far apart. The UAW is currently asking for a mid-30% wage increase over the lifespan of the new contract, down from the initial demand for a 40% pay hike, but still far from what auto manufacturers have offered, at 20% at most.

The union is also asking for other benefits, including a shorter work week and, importantly, an expansion of benefits to plants working on electric vehicles. (Many of these factories are joint ventures with foreign companies, and not unionized).

The UAW’s president wants to recover lost ground after the 2008 auto bailout, when workers agreed to give up longstanding benefits to save auto companies from bankruptcy. 

“The workers were unfairly blamed for everything that was wrong with those companies,” Fain said on Sunday, instead blaming “bad decisions on the parts of the companies that put us in that position.”

“We made all the sacrifices,” Fain argued, and “after a decade of massive profits, the workers have [gone] backwards.”

What about Tesla?

The UAW has long tried to organize workers at Tesla, which does not have a unionized workforce.

The union tried, and failed, to organize workers at the EV maker’s plant in Fremont, Calif. in 2018. The UAW then accused Tesla of illegally interfering in unionizing efforts, pointing to a tweet from CEO Elon Musk. 

At the time, Musk asked why Tesla’s workers would “pay union dues and give up stock options for nothing” if they voted to join the UAW. The union alleged that workers could interpret the Tesla CEO’s tweet as a threat to take away stock options if they organized.

The National Labor Relations Board ordered Tesla to delete the tweet, as well as rehire a Tesla employee allegedly fired over organizing activity. The 5th U.S. Circuit Court of Appeals is now evaluating the order.

Musk has continued to needle the auto workers union on social media. “We pay more than the UAW btw, but performance expectations are also higher,” Musk posted to social media platform X, which he owns, on Thursday.

Yet industry data suggest that Tesla employees earn as much as a third less as their unionized counterparts. Tesla workers earn $45 an hour in wages and benefits, while those at UAW-represented plants can make up to $66 an hour, according to the Wall Street Journal citing industry data.

Tesla employees do receive stock options. Musk on Thursday claimed that “quite a few of our factory techs who work on the line have become millionaires over the years from company stock grants.”

Tesla did not immediately respond to an inquiry about pay at the company.