Tesla (NASDAQ: TSLA) stock fell almost 3% on Thursday following reports that the electric vehicle pioneer is set to raise wages for some U.S. workers. This move comes amidst a broader trend in the automotive industry, where various companies have raised salaries in response to the United Auto Workers (UAW) union’s recent efforts to organize non-union employees.
According to a Thursday report by Bloomberg, flyers displayed at a Tesla facility in California indicated that U.S. production workers would receive a “market adjustment pay increase” in the new year.
This development follows the United Auto Workers’ (UAW) successful negotiations with major automakers, including Ford Motor (NYSE: F), General Motors (NYSE: GM), and Stellantis (NYSE: STLA), in November 2023. The agreements resulting from these negotiations involved a substantial 25% wage increase.
After reaching an agreement with the Big Three, the union began a campaign to organize non-union workers at various companies, including Tesla.
Since then, some automakers increased employees’ wages, possibly preventing union organization action. Hyundai, for instance, announced plans to increase workers’ pay in 2024, aiming for a 25% hourly wage hike by 2028. In addition, Volkswagen proposed an 11% raise for some of its production workers.
Tesla (NASDAQ: TSLA) has reportedly announced plans to increase the hourly pay for some workers at its Nevada battery factory by 10% or more, effective January.
The push for the electric vehicle manufacturer to unionize is not limited to the U.S., as employees in Sweden, Denmark, Finland, and Norway went on strike in late 2023. However, organizing Tesla workers is a tough challenge for the unions, mainly because of the firm anti-union stance of the company’s CEO, Elon Musk.
Tesla shares dropped by 2.87% on Thursday to close at $227.22. The stock has seen an overall gain of 83% over the past year.
Kevin Putnam is a financial journalist and editor based in New York. He specializes in editing news and analysis related to U.S. stock market.
