Deepwater Managing Partner Gene Munster discusses the delta between Tesla wages and traditional automakers in light of the UAW negotiations as well as how long the Big Three can expect to remain in the red.
I don't know what Tesla offers these days but as of a few years ago, Tesla offered all employees, including line workers, great stock packages. I personally know several line workers at Fremont who have made hundreds of thousands, some even more than $1m off of those packages. Legacy does not offer this and IIRC, it is actually against their rules - so UAW workers cannot receive those packages. While this is not part of the base salary, it likely puts many Tesla workers well ahead of UAW labor in terms of overall package.
Stock options work when the stock price goes up. In the last 2 years with precipitous decline in stock price because of their own CEO's selling (to acquire a different business), all the stock options value vanished. It is a double edged sword.
IIRC, it's the unions who have opposed workers receiving stock options as part of their pay. Were I running a legacy auto company I'd love to use stock as a partial pay. Anything that would help from going under. IMHO, making it easy for employees to own stock, to own a part of the business is a great idea. Give them skin in the game.
Interesting Gene - Only way out is for UAW to unionize all the other OEMs including Tesla. Otherwise they are just sinking their own ship(s). 32 hours AND +30% !!! good luck with that.
That won't happen, but even theoretically, it would not work. Auto manufacturing is global game, since US has near-zero import tariffs for cars. GM's UAW plant in Michigan (for example) competes not only with Tesla's non-union plant in Texas, but also with VW's plants in Mexico, Hyundai's plants in South Korea, Honda's plants in Japan, nearly anywhere in the world. Unreasonable demands by UAW make US automakers less competitive, which leads to US auto industry becoming weaker, smaller and perhaps even disappearing over time. That's not only bad for the UAW in the long run, but also terrible for the national economy and security.
This is absolute bs. It's just not true. Where are these numbers coming. I work here at Ford and most people working here are making $18 there are few left making $66 total. A few left making 33$ legacy workers on their way out. These are so dishonest. Our bodies are so screwed doing this work. They make billions in net profit every qrt Billions with a B. Y'all be feeding narratives that just are bologna lol
The big unanswered question for me is: Why would Tesla workers willingly accept wages that are so much lower than the Detroit 3? There has to be more than just the numbers. I remember hearing something about stock options that are offered to Tesla employees, which have created more millionaires in their workforce than any other auto maker in history.
@@Teamvenomracing As I understand it everybody down the the assembly people are empowered to improve things. This is huge from a mental health standpoint.
Hold on a second.... "Workers owning the company"? Isn't that like.... Communism!!! 😱😱😱😱😱 . 😉 . Come to think of it, that should be the aim of the Unions? "We'll do you a deal..... Low rise now. BUT.... IF we get the company through this and *really* making money... Pay up! (In stock!!) THEN you get a motivated workforce!
@@rogerstarkey5390 Communism is actually more like the government owning the company, not the workers. It's what they want the workers to believe though.
@@rogerstarkey5390 You don't know what communism is. Communism consists of a small group of grifters (The Party) owning everything and everyone else is poor. Employee owned companies exist in the US, in a capitalistic system, and work very well. The employees select the board which selects the CEO and the employees share in the profits of the company. Its like any other public company with shareholders except the shareholders are the employees.
Good video, i do think your pretty optimistic about being in the red for 2 years. I honestly think if they don’t go bust, they’re in the red for close to 5 years.
@@goblinzl1 That’s a very short sighted outlook on your part. If you looked at what’s going on and how things are going, things aren’t very good for them in the next 5 years. Look into it…
@@SosopChabot things are just fine for the big three right now. theyre looking to sell close to or over 2 million vehicles. tesla while sales are soaring are still a small player. yes, vehicle sales fluctuate but you cant say the big three are hurting for money that just isnt true.
No one is getting a 32 hour work week. The rank-and-file were even scratching their heads when we heard that in our proposal. More vacation time is what we want. Right now it takes us 20 years to get 4 weeks vacation.
Gene great video but 1 thing you didn't include is Optimus Robots, now that AI Vision is solved I believe we will see the Optimus robots starting to work on the Assembly line at Tesla over the next 2 years. That will put further pressure on UAW and the "Big 3" as Tesla will need less humans to do the same amount of work.
@TheDjnatronic Don't mention it to the luddites! The UAW will negotiate about no Optimus in our factory. Just like they want to conserve the jobs of their ICE drive train folk! Or perhap unionize those pesky Optimuses. That would work for them too. Thinking about it, that would be their favorite way!
Watched a recent Tesla EV 'reassembly'. It certainly looks like the car was designed in a way that would make it easy for a robot to replace a human for many of the tasks. I suspect the low cost, box assembly approach EV that is being developed is optimized for non-human assembly.
"Optimus Robots" = Tesla Bots (made by Tesla for Tesla, not unlike early Apple manufacturing automation with Macintosh PCs managing the assembly of new Macs). Agree, reducing labor cost thru reducing labor is the road to profitability and competitiveness with China too.
The fact is the Big3 Auto manufacturers will ultimately at some stage write off their C E plants and take huge tax losses, to benefit their bottom line (at the gov'ts expense, and increasing even more inflation) .
Tax losses are only beneficial if you have taxable income to offset. Legacy is in deep trouble. Most companies, if they survive, may only survive by first going through bankruptcy in order to get out from under massive debt. Governments are likely to try to support failing companies in order to protect jobs and local economies. IMHO, the next five years are not a period in which to own any legacy auto stock.
UAW workers do not look like they get much work done. How much time in an 8 hour shift are they actually on the line, doing work? How many labor hours does it take to build a GM/Ford vehicle compared to Tesla?
Don't quote me, but I think they get the option to purchase on a particular date, at the best price over a previous period. So let's say September 1st 10% of salary, best price between June 1st and September 1st. So they got ±$207 when the stock was at ±$245. Instant 20%. Even if it's going down, you get the low price (could go lower, but you can also buy at the bottom "after the fact". They got that ±$108 that most of us missed in January when the stock was almost double in April.
Which parts? The powertrain is a given. That is a dead end. The first two? They are not unreasonable. How is Mary Bara justify her salary? Or any legacy ICE manager? Cant be because they are such awesome managers.
@@larsnystrom6698 I know right. I actually listened to the clip which lists the demands. And made at least a comment with substance instead of the usual internet negativity no substance pov. It is a skill.
I agree this is unreasonable. They're asking for a 35% pay increase AND a reduction in work hours. If the average worker makes $66/hr including benefits, that's $137k/yr. A 35% increase would make $185k/yr, but working 20% fewer hours (32 hr week). That would mean their hourly rate would be $111/hr!!! That's not a 35% increase, it's 69% increase (which is why they obscure it by separating the demands for wage raise and hour decrease)
Don't forget the big three are also trapped in the dealer model for sales. They don't make money on the sale they make money on the service department and have no incentive to sell electric cars.
Here is the prediction in my mind, some numbers of years from now, brand names such as Buick, Chevrolet, Cadillac will be in the hands of auto company not named GM. The real questions are, how soon that will happen? and how much those brand names will be worth
Maybe. Or now that Chinese companies have their nose under the tent they will do what the Japanese companies did a few decades back and build their brand names. We're seeing Chinese named EVs selling in Europe and Asia.
TESLA EMPLOYEES GET STOCKS. Auto contracts are normally 4yrs. If you average the Tesla stock gains over 4 yrs you will see they have been paid incredibly well. The stocks they got 4yrs ago in Jan 2020 have went up 1000% to the peak. As of today they still sit "up" 600%. The stocks they got in Jan 2021 are flat, Jan 2022 are down about -12% and the stocks they got in Jan 2023 are "up" about 125%.
The lack of understanding on the part of the UAW about the precarious position the Big 3 auto makers are in is flabergasting. They are actively trying to accelerate the inevitable, irreversible demise of their employers.
It seems like Tesla will become the replacement for the Tier 2, 3, 4,.... and more suppliers to the OEM's in the electrical segment. Hyundai is following into the Giga Press Method as are all Chinese makers. FSD will be on a per subscription ($200/mth) and no other maker can build anything like it. If 70% of OEM's $$ comes from after sale (Garage) then that business model can not be sustained. This means Tesla is the only company who can provide after market service.
I did some rough calculations and I found that if Ford cut its current annual dividend by 50%, there would be sufficient funds to pay the union workers' pay demands (not other benefits). Someone please correct me if I am wrong. I've owned company shares that have reduced dividends. Did I like it. No, but I accepted it. I thought it was better to support these companies than to see them go under.
Legacy autos are only a few months into building battery factories. They don't really have large supply of batteries like Tesla does so they're going to have to build up to it. It takes two to three years to get a battery factory off the ground and probably another 2 years to make them efficient. So that tells me that auto companies won't be in the black for min 5 years, if they can even make it that long.
How much are UAW Union Dues? Can employees leave the union and go back to work or they have to do what the union says? This is going to hurt Ford and GM end of quarter numbers... although are EV workers striking or just ICE car workers?
It's interesting that no one is talking about the combined demands. They're asking for a 35% pay increase AND a reduction in work hours. If the average worker makes $66/hr including benefits, that's $137k/yr. A 35% increase would make $185k/yr, but working 20% fewer hours (32 hr week). That would mean their hourly rate would be $111/hr!!! That's not a 35% increase, it's 69% increase (which is why they obscure it by separating the demands for wage raise and hour decrease). That percentage is the same regardless of what rate you start at, (for those who want to argue their current wage is something different).
No one is actually getting a 32 hour work week and getting paid for 40 hours. More vacation time will be the outcome and the solution for us over worked UAW members. Everyone seems to be okay with the CEO's making millions of the backs of us, but have so much to say when the workers ask for more money. We build cars and trucks we can't even afford. Why isn't the conversation about out little Tesla pay their employees. Elon musk's the richest man in the world for a reason. I don't want to hear about their employees stock options. Are they selling their stocks weekly to supplement their low weekly checks? How about the big 3 keep the same energy that they have for their factory workers and apply it to their CEO's. Tesla CEO's don't make as much money as the big 3 CEO's but I don't hear a discussion about that.
@@333DLT I 100% agree that CEO's are overpaid and that needs to change, but that's a separate issue. I 100% agree Tesla's employees should be better paid, but that's a separate issue. We can and should have those discussions, but they aren't relevant to whether or not UAW demands are reasonable, which is what this discussion is about. Thank you for saying explicitly that no one is getting a 32 hour work week, bc THAT was my actual point. The way it's being presented, UAW is asking for a pay increase AND a work time reduction, and I pointed out that I thought that was unreasonable. If that's just a negotiating tactic and they are not, in good faith, asking for a shorter workweek, then be transparent and say so, that's all I ask.
@@richardsego I work for Stellantis and when I seen the 32 hour work week I was like what the hell. What happen before negotiations start is our union officials pass around a paper with Union demands we want to see address in this contract. No where in there was a 32 hour work week. We have no idea where that came from. We have know that working in our industry come with some times working 6 or 7 days. We get paid double time on Sundays and there isn't one person that turn down working on Sundays and Sundays are optional not forced. At least not at Chrysler. I can't speak for the other two companies. I'm in the camp of needing more time off. It takes 15 years to get 3 weeks vacation and 20 years for 4 weeks. That needs to change.
Legacy automakers may be buying Optimus robots from Tesla to operate their lines. Thereby reducing labor costs. Unless there’s a better option. I think Tesla would be willing to do this.
Is the business model( manufacturers,dealerships ,employees ,legacy costs)remain a viable design for the future ? If not ,what would you imagine a model that would replace the current one look like?
Don't forget Tesla is still a start up company hasn't been around for at least 100 years the wage for employees for the amount of time since Tesla built the first production vehicle till now compaired to what the big three in the same time frame
Legacy automakers caused their doom by not taking electrification seriously. They bet on Tesla failing instead on their own success. All while the CEOs were getting raises and the workers were making concessions. I feel bad for the workers because they didn't choose this losing strategy.
Yes, the presentation, which is valuable, somewhat implies that the UAW requests are the things that are putting the big three in jeopardy, whereas their blindness to what was occurring around them, plus a very conservative strategy for innovation--all of which are the fault of management, not labor--is what will doom or diminish them. I have little doubt that they will blame the unions, however.
@@nathanielgathing659 If unionized car companies are going to survive the work rules need to be tossed out and rewritten to allow efficient use of labor.
@@nathanielgathing659 First... *SURVIVE* ! THEN ask for compensation. . At that point (if they DO remain solvent) they'll be in a situation where the *smart* move would be to ask for stock in a company which ..... Survived! and as "the rising tide raises their ship" they'll do very well. . But, if they sink the ship.....?
Any UAW workers with 15 years of seniority or less DO NOT have pension, which is a large majority of the workforce. Also the starting pay has been at $15.78, most are temporary workers do not have full benefits or profit sharing. I don’t believe The Big 3 worker cost is 40% higher than Tesla’s.
I heard Tesla pays better PLUS stock options. They're just all working way more than 40 hours p/week, and the company is comprised of a lot of small elite teams.
So the big three workers want a 35% wage increase and reduce work by 1 day or 8 hrs? Do they know they are just pressuring the big three to replace them with the cheaper robots like Tesla does? Also asking for a 35% raise and work 1 day less, is just asking to be fired. Am I missing something here?
Smart Tesla workers will settle for less than estimated because they realise what the value of their Tesla stock will be by the time they retire. Getting assurances from the :"Big Three" won't mean anything when at least 2 of the 3 fail, assuming Sandy Munro's right in that he figures Ford has a chance of surviving.
Ford. Chapter 11. Dumps ICE (and if possible dealers) Restructures as a smaller EV company. Uses the "assistance" to finish the Tennessee factories. Then, IF the products are half decent. They emerge with "certain systems from another company" inside. . In Jims dreams... Or, they just go bust (with the others?) . We shall see.
Because we are told the even the line workers get stock. The line workers are not treated as robots and anybody can plug in cord. Anybody can point out a better way to do something and have it acted on. Think they get a bonus for point it out too. Get the idea.
Gene, I’m disappointed. 1) You fail to point out that the “25%” is over four years. 2) Do you really think that Bezos Washington Post is an objective source for anything Tesla? 3) Tesla’s biggest labor advantage is they are not burdened with union work rules and union culture. 4) Are Tesla stock options included in the calculus?
I just looked up the average wages of UAW line workers and it’s 28 dollars an hour. I know you quoted total compensation but the bottom tier workers don’t get very good benefits and they make up the majority of line workers atm if I’m not mistaken. Are you cherry picking information to spin this topic?
Makes me wonder if these numbers aren't including things like upper and middle management, engineering, accounting, programmers, etc. All highly specialized jobs with stiff competition from other industries that require higher wages for retention.
I would think so because they are very much on the high side. When I see things like this, it really makes we second guess everything I see and hear. So many people spreading misinformation. What's worse is the amount of people who just accept this misinformation without any questions or thought on their part. @@plav032
The game will be over for legacy OEM'S in 5 years. By that time, electric cars will be 80% of the global market, internal combustion cars, only 20%. Economies of scale will have been lost on their ICE vehcles, making them unprofitable. None of them have plans to take advantage of the change to electric, so they won't have the economies of scale to to combat both Tesla and the Chinese automakers. Servicing their huge debts and redundancy payments will drive them into bankruptcy. Government bailouts might give them a couple of extra years. The game will be up by the end of this decade.
Most ive ever made was $40/hr. Which was awesome Id happily take $66/hr. No need for a 40% raise either. That 4 day work week would be nice but i can settle on four 10s. Lol
It’s possible for both to be true: The CEOs et al definitely ARE overpaid….and the UAW itself IS being unreasonable, and seems mostly interested in….the Union…NOT in the long-term health and long-term employability of the auto industry.
I guess that I am the only one that thinks $66 an hour for a factory job and wanting 35% more and a 32 hour week is out of touch with reality. I would be rich if I made $66 an hour. It's no wonder we can't compete in the world in manufacturing.
That $66/hr is total cost to the employer, it includes things like health insurance and retirement contributions. i imagine that the workers only make ~$40/hr... still not poor, but given the recent inflation it isnt great.
so an autoworker in the US earns more than a degree educated software engineer/enterprise architect or Doctor or Dentist in the EU/UK. Before the increase they are asking for. Riiiiiight.
Its an average of the labor cost to the employer, not direct paid wages, this includes things like benefits, pension, insurance, sick days, etc, I'm not sure if this includes just assembly line/blue collar jobs or middle management, engineering, etc... If the big 3 have a excess of non production line staff it's going to skew the average a lot. He also failed to mention Tesla employee's benefit's of stock options.
Nah! Rejection to 20% raise looks fishy...that gives big 3 the valid reasons to eliminate them all. Don't sit too comfortable with Tesla yet, now Tesla workers are fed with the idea of a raise, that unsatisfactory will reflect in productivity and quality...Big 3 workers should take the offer, it's a great offer in this economy. You're being paid more than people with a lot of experience and a degree in North America.
Watching your video it is obvious you did not mention Wright’s law - for any manufacturing process, every doubling of production there is a 25-28% decrease in manufacturing costs. Labor cost if the OEM is only 5% of cost of manufacturing. The legacy auto manufacturing costs would increase from 5% to 7% the cost of manufacturing. Tesla is dramatically changing the cost of manufacturing their product. The rear casting eliminated 180+ parts that had to be assembled! What, no mention of the gross “management “ compensation.
Now, take those castings (and the front castings, AND the "centre" [pack] castings) assemble all "local" components in different parts of the plant, put each casting assembly on a "robot transport" and instruct those transports to meet "Somewhere" in the building. Bolt the 3 assemblies and the bodyshell together. . Thinking about this, you COULD have a factory build which is literally a box, with a sensor grid for position. No gantry "line" to install? . Then, once the first factory is working, you copy the program. Build another "box". Build the transports in a dedicated factory. Assign each a "designation" (Borg, much?) Put them inside the box. Switch on. Each unit "knows" its function and the "factory" ("collective"?) is ready. . Repeat globally.
the UAW funds the Biden campaign fund and I do take pleasure is seeing that they are getting what they deserve, after all, Biden did award Mary Bara the EV award while continuing to not even mention Tesla as an american sucess story.
Should I remind you that the last major bailout was signed off by Bush? . It's simply "The guy in the Big House when "it" hits the fan" . (Your attitude is part of the problem. "Ping pong politics")
WAKE UP; A JOB is getting paid for what you “do”, like cooking eggs; But a PROFESSION/CAREER is getting paid for what you “Know” like designing electronics, cars, etc For a Job one needs to be CONSCIOUS, but for a career one needs to be EDUCATED not not just Paid-Off like a Politician or Union
@rickhammond2473 well the stock has been cut in half from highs 3 years ago so they lost even more then..tesla stock has no dividend as well so I would not be comfortable with that
