Tesla Targeted By Auto Unions

Tesla Targeted By Auto Unions
Blomst / Pixabay

Tesla Motors Inc (NASDAQ:TSLA) has really been turning the auto industry upside down. First the company ruffled the feathers of auto dealerships, which don’t appreciate Tesla cutting them out of the auto sales process. Now auto unions are trying to push their way into the Tesla production facility, according to SFGate.

Tesla workers not part of a union

Currently workers at Tesla Motors Inc (NASDAQ:TSLA)’s plant in Fremont, Calif. are not part of a union, unlike workers at facilities operated by the other automakers. In fact, the factory in which Tesla is now manufacturing its Model S sedan was once a union shop. In those days, it was part of a joint venture between General Motors Company (NYSE:GM) and Toyota Motor Corp (NYSE:TM) (TYO:7203).

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Now the United Auto Workers union is trying to get in on the action at Tesla’s plant. Bob King, president of UAW, apparently told a website which focuses on the auto industry that they had created an organizing committee at Tesla’s factory. In addition, he also said UAW representatives had already met with Tesla CEO Elon Musk.

Unions not part of Silicon Valley

Tesla Motors Inc (NASDAQ:TSLA) has been calling itself a technology auto company rather than just an auto company. Until now, unions have pretty much been kept out of Silicon Valley, which is known for its high-tech workforce. They have apparently tried to push into the region a number of times, although they haven’t been successful.

Analysts have been assuming that if Tesla survived, unions would be trying to get into the automaker’s manufacturing facility. However, they say it is difficult to predict how unionization might affect Tesla—if it happens at all. Some suggest that allowing labors to get into Tesla’s shop would only raise labor costs, right as the automaker prepares to begin manufacturing mass market vehicles at a lower price point.

Will Tesla’s Musk embrace the auto industry culture?

If Tesla Motors Inc (NASDAQ:TSLA) does allow unionization to occur, it would be a step toward making the culture at the company a little more like that of other automakers. Apparently the topic is a touchy one at Tesla and the UAW, and Musk’s views on it aren’t known. He said at the time they purchased their factory from Toyota that they were neutral on the issue of unionization.

In Tesla’s last annual financial report, the automaker did mention the possibility that unions could make their way in. That was listed under risks to its business. The automaker said its reputation could be hurt in the eyes of investors if it unionized, thus negatively affecting its stock price while also increasing its labor costs.

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