Tesla raising factory worker pay in U.S., as UAW aims to organize

on Jan12
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An aerial view shows the Tesla Fremont Factory in Fremont, California on February 10, 2022.

Josh Edelson | AFP | Getty Images

Tesla is rolling out “market adjustment” pay increases this month to many of its factory workers across the U.S., according to notices posted at the company’s vehicle assembly plant in Fremont, California.

Bloomberg first reported on the posters.

An employee in Fremont confirmed that the 2024 pay rate information was distributed at the site, and that increases were recently implemented by the company. The person asked not to be named, citing a lack of permission to speak with the media.

CNBC reported last month that Tesla workers at the company’s battery plant in Sparks, Nevada learned their hourly rates would be going up in January. The hikes for hourly workers in Nevada represented about 10% increases, depending on position and not including bonuses that some employees would be able to earn.

The fresh pay increases follow an announcement by the United Auto Workers that it would aim to organize at least one Tesla plant after major wins at the big three Detroit automakers. The UAW is circulating an authorization card online, and is gathering names and signatures of Tesla workers to gauge their interest in forming a union.

Under Shawn Fain’s leadership, the UAW seeks recognition of the union by the company or a vote when it secures about 70% of workers at a factory.

“Tesla is now following in the footsteps of Toyota, Hyundai, Volkswagen, and almost every other car company in raising wages in the wake of our historic victory at the Big Three, as non-union autoworkers everywhere are starting to stand up for themselves,” Fain said in a statement emailed to CNBC by a spokesperson. “As great as these raises are, they still fall far short of what the companies can afford and what autoworkers are worth.”

The union didn’t say how many Tesla workers have signed the authorization card so far.

Tesla’s director of people operations and programs didn’t immediately respond to a request for comment.

Tesla CEO Elon Musk has long clashed with unions. At the 2023 New York Times DealBook Summit in November, he said “I disagree with the idea of unions,” and claimed they create, “a lords and peasants sort of thing.”

The National Labor Relations Board has found that Tesla violated federal labor laws on more than one occasion. In 2018, for example, Musk tweeted that workers at the Tesla plant in Fremont would lose stock options if they unionized. A federal appeals court ruled that his tweet amounted to an unlawful threat.

President Joe Biden previously said he supported efforts to organize workers at plants that didn’t yet recognize unions. That group includes Tesla and Toyota.

Tesla has faced challenges with unions in Europe as well, including strikes and boycotts last year involving service workers.

The New York Times reported that at least 15 unions have joined IF Metall in strikes to “try to force Tesla to negotiate a collective bargaining agreement to set wages and benefits that reflect industrywide norms in Sweden.” The Associated Press reported that large pension funds in Scandinavia have asked Tesla to reconsider its approach to working with unions and collective agreements.

Tesla shares closed down 2.9% on Thursday following reports of the U.S. pay increases, and news that the automaker would suspend production for two weeks in Germany due to supply chain problems pertaining to attacks in the Red Sea.

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