Barclays: Tesla wages will go up amidst fallout of UAW strike

During an appearance at CNBC’s The Exchange, Barclays senior autos analyst Dan Levy predicted that Tesla will probably see its employees’ wages increase amidst the fallout of the ongoing UAW strike. 

One of the UAW’s biggest demands is an increase in its employees’ wages. As noted by CNBC in its segment, veteran automakers like Ford and General Motors are already paying their employees more than Tesla per hour. Thus, if the UAW succeeds in higher pay, their gap with Tesla will only widen. 

The Barclays senior autos analyst noted that the profit impact of lost production for the Detroit Big Three is estimated to be around $40 million to $60 million per week per automaker. This number, however, will likely be made up when the strike ends. Levy also noted that there is no way for the UAW’s full demands to be met. 

The analyst, however, noted that the ongoing strike will affect the labor costs of automakers in the United States. As such, Levy stated that he believes Tesla will likely be increasing its pay for its workers as well, though he also acknowledged that the EV maker has been very successful with its strategy of offering stock to its employees. 

“We think their costs will increase. This is naturally going to happen, not only across Tesla but also across the trans plant OEMs. I think this is naturally the case. Can they unionize? We noticed in the past that it’s been a tougher effort by the UAW, and that in part has been because Tesla has benefitted from paying its employees with stock comp. 

“With the stock now where it is, that may not be the same types of benefits in the future. So wages are going to go up at Tesla. I think for them, though — and this is the case for all automakers — it’s a constant battle on all aspects of cost to offset these different inflationary pressures, including on wages,” Levy said. 

Elon Musk has argued that Tesla’s compensation plan has made many of Tesla’s employees millionaires over the years. He also warned that the UAW’s demands would likely drive the Detroit Big Three into the fast lane toward bankruptcy. 

Watch Dan Levy’s take on the UAW’s strike and its effect on auto wages in the US below.

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