'Battle royale': Tesla and anti-union Musk make enticing targets for UAW's next push

Target massive California plant with 20,000 employees

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After a self-proclaimed victory over Detroit’s automakers, United Auto Workers president Shawn Fain has made clear where he’ll direct his energy next.

“One of our biggest goals coming out of this historic contract victory is to organize like we’ve never organized before,” Fain said Oct. 29. “When we return to the bargaining table in 2028, it won’t just be with a Big Three, but with a Big Five or Big Six.”

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Several major car companies, including Toyota and Volkswagen, have auto plants in the U.S. that employ non-union workers, but there’s one particularly enticing target for the UAW: Tesla Inc. It’s the most valuable automaker in the world, the electric-car leader and employs tens of thousands of non-union workers across California, Texas, Nevada and New York.

Tesla’s roughly 20,000-worker plant in Fremont, Calif., currently has a UAW organizing committee whose members are talking to co-workers about the advantages of collective bargaining, according to a person familiar with the efforts who spoke on condition of anonymity. The UAW has committed to providing whatever resources are necessary for the campaign, that person said. The union didn’t respond to a request for comment on its spending plans.

Unionizing the EV maker would not only grow UAW’s membership but it would help the union exert its clout as the industry shifts to a battery-powered future.

“The UAW would love to get into Tesla, but I don’t think they have a chance,” said Mark Eberley, a former employee at the Fremont plant who worked on a UAW-backed union drive at Tesla before leaving in 2020.

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Musk’s vigorous pushback

Fain has a formidable foe in Tesla chief executive Elon Musk, who has near-limitless resources and doesn’t flinch at legal threats or high-profile controversies. Musk’s vigorous pushback helped squash the union drive that Eberley worked on. Tesla executives and Musk did not respond to an email seeking comment.

“Any effort to organize Tesla would be a battle royale,” said Seth Harris, former deputy director at the National Economic Council under President Joe Biden.

Fain, a force in his own right, hopes to use his wins in Detroit to show how his energy and unconventional tactics get results. He secured record-setting wage gains and beefed-up 401(k) retirement benefits, among other concessions, in talks with Ford Motor Co., General Motors Co. and Stellantis NV. “We’ve had thousands of non-union autoworkers reaching out and wanting to join our movement,” Fain said earlier this month. He has called Tesla, Toyota Corp. and Honda Motor Co. Ltd. workers “UAW members of the future.”

Some current UAW members are already fired up to take on Tesla. “Go out west to California? Absolutely, I would go,” said John Jake Kincaid, a Stellantis employee in Michigan. “Show them our strength.”

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Still, fighting for a contract at companies with established relationships with union workers is a far different effort than starting from scratch. Several workers who were key to Tesla’s earlier union effort are no longer at the company.

The Fremont plant’s history with the UAW predates the electric vehicle maker. For about 25 years, Toyota and GM operated the facility together in an unusual joint venture. It was a union shop. In 2009, GM pulled out of the partnership as part of its bankruptcy proceedings and in 2010 Toyota shut the operation down, throwing 4,700 people out of work. A month later, Tesla bought the sprawling 5.3 million square foot factory; the union didn’t come with the purchase.

Talks of unionization came back to Fremont in 2016, when Jose Moran, a production worker there at the time, reached out to the UAW. Moran had been a member of the union when he worked at the factory under its previous owners. An organizer from the union helped build a network of interested employees and create a voluntary organizing committee. In February 2017, Moran went public with the unionization effort in a Medium post where he talked about “excessive” overtime, job-related injuries and relatively low pay for Tesla plant workers.

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Tesla Freemont factory in California
In an aerial view, a sign is posted on the exterior of the Tesla factory on April 20, 2022, in Fremont, Calif. Photo by Justin Sullivan/Getty Images

Musk aggressively opposed the effort. He came after Moran personally on social media and called the union drive “morally outrageous.”

Companies in the U.S. have ample legal ways to derail union drives, such as making workers attend anti-union meetings. But Musk and Tesla also employed multiple illegal tactics, according to National Labor Relations Board rulings, to stop the organizing effort: Musk threatened staff via Twitter, and the company “coercively interrogated” union supporters and fired a worker because of his activism. (Tesla has appealed the ruling about Musk’s tweet and the worker’s firing.)

Keeping labour costs down helps Tesla sell its cars at competitive prices, which was particularly important to the company at the time. The EV maker was struggling to ramp up production of its landmark Model 3 sedan and in 2018 narrowly avoided bankruptcy. Tesla warned investors in an annual report that unions “can result in higher employee costs and increased risk of work stoppages.”

Within a few years, the campaign had quieted down and lost momentum. Organizers struggled to gain broad support, and the effort never came to a vote. Meanwhile, the UAW’s own leadership was embroiled in a corruption scandal. Dennis Williams, the head of the UAW from 2014 to 2018, pleaded guilty in 2020 to a charge of conspiracy to embezzle union funds and went to prison.

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Things have changed in the last five years that work both in favour of and against a union drive. For one, the UAW has new leadership.

UAW corruption scandal

Some people who’ve worked at Tesla told Bloomberg the UAW’s past corruption scandals and the closure of the plant when the union represented workers there are seen as liabilities. At the same time, general sentiment toward unions has dramatically improved: In 2016, a little over half of Americans approved of labour unions; now two-thirds do. A new crop of leaders, like Fain, have struck a chord with the public by saying they’re fighting for the whole U.S. working class.

The last few years have also seen more organizing at previously union-free companies, including Amazon.com Inc., Apple Inc. and Starbucks Corp. Inflation, poor working conditions and growing income inequality are among reasons workers say they want to unionize.

Fain has said that he wants to “fight to make sure that auto jobs everywhere are good jobs” and told CBS News that Tesla provides “pitiful” pay so that “greedy people like Elon Musk can build more rocket ships.” Tesla is also facing a lawsuit from the U.S. Equal Employment Opportunity Commission alleging racial discrimination at its Fremont plant.

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Compensation is hard to compare between Tesla and the Detroit automakers: benefits like pensions and health care complicate the picture. The Detroit automakers have some of the most generous health-care plans. Tesla, for its part, offers its workers both restricted stock units and an employee stock purchase plan. (The tweet that got Musk in trouble with the NLRB suggested that workers would give up their stock benefits if they voted to unionize.)

One thing that hasn’t changed is Musk’s attitude towards organized labour. “A union is just another corporation,” he tweeted last year.

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Then, in February, Tesla terminated dozens of workers at its Buffalo, N.Y., plant the day after employees announced a unionization campaign with Workers United, which isn’t affiliated with the UAW. The NLRB is investigating the union’s claim that the firings were retaliatory and meant to chill the organizing campaign, which Tesla denies.

Musk shouldn’t underestimate Fain, either, said Harris, who’s now a professor at Northeastern University. “The UAW is showing itself to be a militant, well-organized force.”

— with assistance from Gabrielle Coppola, Keith Naughton and David Welch

Bloomberg.com

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