In a move reported through notices posted at its vehicle assembly plant in Fremont, California, Tesla is implementing “market adjustment” pay increases for a significant number of its factory workers across the United States this month. An employee at the Fremont site, who preferred to remain anonymous due to a lack of media authorization, confirmed the distribution of the 2024 pay rate information, revealing recent pay raises.
Last month, CNBC disclosed that Tesla workers at the company’s battery plant in Sparks, Nevada, were informed of hourly rate increases scheduled for January. The increments for hourly workers in Nevada equated to approximately 10%, contingent on the position and excluding potential bonuses for certain employees.
These salary adjustments follow the United Auto Workers (UAW) announcement of its intention to organize at least one Tesla plant, aligning with the union’s recent successes at major Detroit automakers. The UAW is actively collecting authorization cards online, gauging interest and seeking recognition from the company or a vote when it secures about 70% of workers at a given factory under the leadership of Shawn Fain.
In a statement forwarded to CNBC by a spokesperson, Fain noted, “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.” However, Fain emphasized that the raises, while significant, fall short of what the companies can afford and what autoworkers are worth.
The exact number of Tesla workers who have signed authorization cards remains undisclosed by the union. Despite repeated requests for comment, Tesla’s director of people operations and programs did not immediately respond.
Elon Musk, Tesla’s CEO, has a long history of discord with unions. During the 2023 New York Times DealBook Summit, Musk expressed his disagreement with the idea of unions, characterizing them as creating “a lords and peasants sort of thing.” The National Labor Relations Board has previously found Tesla in violation of federal labor laws, notably in 2018 when Musk’s tweet regarding stock options for unionizing workers was deemed an unlawful threat by a federal appeals court.
President Joe Biden has expressed support for efforts to organize workers at plants without existing unions, encompassing Tesla and Toyota. Tesla has faced challenges with unions in Europe as well, including strikes and boycotts last year involving service workers. Reports indicate that at least 15 unions, joined by IF Metall, have participated in strikes in Sweden to pressure Tesla into negotiating a collective bargaining agreement aligning with industrywide norms. Additionally, pension funds in Scandinavia have urged Tesla to reconsider its approach to working with unions and collective agreements.
In response to the news of U.S. pay increases, coupled with production suspension in Germany due to Red Sea-related supply chain problems, Tesla shares closed down 2.9% on Thursday.
