Elon vs the UAW

Nearly everybody knows that Elon Musk does not like unions—just like he does not like oppressive big government and other violators of free markets and individual liberty. Although purported to be enforcers of fair wages and safe working environments, unions tend to be invasive, coercive, and sometimes criminal. The United Auto Workers is one of them.

There is no question that the UAW is lusting to get its meat hooks onto America’s newest, greatest, most prosperous, and most valuable automobile company—Tesla. Its happy well-paid workers (with very few exceptions) are very satisfied making fine cars in spotless new high tech factories without the hassles of union dues, arguments with union bosses, calling new workers “scabs,” and being begged to go on strikes and spend hours carrying picket signs in the cold rain.

Columnist Matt Hardigree wrote, “Elon Musk garners little affection from the left-wing arm of the labor movement (and the Democratic Party) that’s come in to help support the UAW’s leadership.” But WHAT “leadership”?

In just about every case, any company is better off without union intrusion or government intervention. It is free to offer reasonable wages and hire the people that it chooses. On the other hand, workers can accept or refuse the wages and environments offered. Somewhere in the middle, the law of supply and demand will settle disputes and disagreements without any need for meddling from outsiders. This translates into greater productivity, better products, and lower costs and prices.

There is no need to go on strike. If a worker is unhappy for any reason, he can quit and seek employment elsewhere. If a worker fails to adequately perform, the company can fire him, or perhaps pay a lower wage. But NOBODY has a right to coerce a company or its workers.

In the past, Musk actually invited the UAW to come to his Fremont, CA factory and hold a union election among his employees, already knowing that they would say, “NO.” Even former UAW members rejected the offer.

Tesla workers earn from $22 up to $39 per hour while Ford and GM workers get from $25.25 up to $36. UAW’s president Shawn Fain claimed that Tesla's pay is “pitiful,” that workers are just getting by, so that “greedy people like Elon Musk can build more rocket ships.” But Tesla offers stock options, and Musk has openly stated, “Quite a few of our factory techs who work on the line have become millionaires.” That one item alone is worth far more than any benefits a union could ever hope to offer.

There is no worker shortage. Even though Tesla requires its employees to produce with minimal “goofing off,” the desire to be part of the world’s most advanced and fastest growing automobile manufacturer is overwhelming. In 2022 alone, over 3.6 million people applied for work at Tesla—25.7 times its entire global work force. A Fremont factory worker said, “People are proud of what they do here. They believe in the mission of the company.”

Today, Tesla has 20,000 workers at Fremont and 140,000 worldwide.

When unions find businesses that are reluctant to accept their “offers,” they hire spies to apply for jobs at them and seek out strategies to entice the workers to adopt the “benefits” of becoming unionized. To get a foot in the door, they must coerce at least 30% of the workers to be willing to join. The union holds an election, and if it gets the needed 30% approval, it has a shot to take over the company.

But the company can resist. Sometimes it wins and remains unscathed. Sometimes it loses to the union, and the union begins demanding higher pay and other benefits. The workers enjoy these perks for a while, but the company’s profits diminish. For a while, the company can survive, but as the union’s workers demand more and more, and the profit pie diminishes to a breaking point, the company is forced to shut down, and EVERYBODY loses his job and his benefits. The company could either go bankrupt or relocate to a more business-friendly environment, far away from the hostile unemployed workers and the union’s tentacles.

A perfect example of a train wreck caused largely by the UAW is Detroit, often called “Motown.” In its heyday, it was the automobile capital of the world. Look at it today. The automobile manufacturers that survived bankruptcy have fled to other states and other countries.

In Europe, millions of workers have recently erupted for several months in the United Kingdom, France, Germany and Spain, causing considerable mayhem.

Fortunately, U.S. unrest is at a low ebb. Union memberships across the board have diminished, including the UAW. They have plummeted from about 33% in the 1950’s to 10% today. People have become wiser and wiser about the corruption and devastation they have wrought in the past. They have learned that getting too greedy for higher wages has killed the geese that used to lay their golden eggs.

Today, according to the Hamilton Project, the U.S. has one of the lowest union memberships among industrialized nations, a striking contrast to the days of violent demonstrations and brawls decades ago. However, we still suffer from public-sector unions. Their membership rate is 33.1 percent—more than five times the 6 percent rate at the private-sector. Massive, excessive government expansion is largely to blame. The highest memberships include firefighters and police officers (34.6%) and teachers (33.7%).

Alabama, along with former union strongholds (Michigan, Wisconsin and Indiana) are now fortunate to be blessed with right to work laws that prohibit compulsory union membership. Today, 30% of America’s 14.3 million union members remain in California (2.6 million) and New York (1.7 million).

On Quora, Seth Chazanoff had this to say: “The way that unions operate in the United States if you are in management, you have to be crazy to want to have a union in your company.

“Unions will promise to increase wages and benefits from whatever the baseline is, while protecting non-productive workers. They typically drive down productivity, since merit based raises go away in favor of raises across the board.”

Seth recalled “a small company about 30 years ago” that hosted barbecues for its employees on Friday afternoons while still “on the clock.” They were very popular. A union tried to sue the company to stop them, claiming they were “unfair labor practices.” As a result, the employees flatly refused to join the union.

How well do Tesla’s employees like their CEO, Elon Musk? Workplace culture website, Comparably, recently released the results from its 2018 Best CEO Awards from over 10 million ratings collected from more than 50,000 companies via employees’ anonymous votes from November 26, 2017, through November 26, 2018.

At both SpaceX and Tesla, Elon’s employees ranked him “among the best CEOs in the United States.” They praised him for his “can do” attitude and his dedication to his work, right down to sometimes working 22 hour days and sleeping on the factory floor. When asked by a Twitter user how much he needed to work to change the world, Musk replied that around 80 hours a week were necessary.

Musk strives to be part of every decision his companies make. When testing a risky new part of an autopilot feature in a Tesla, he personally became a living test dummy to back up his argument.

Thomas Sowell says it in a nutshell: “The most fundamental fact about labor unions is they do not create any wealth. They are among a growing number of institutions that specialize in siphoning off wealth created by others…. Unions are for unions, just as corporations are for corporations, and politicians are for politicians. Nothing shows the utter cynicism of the unions and the politicians who do their bidding like the so-called Employee Free Choice Act, like the Obama administration tried to push through Congress. Workers’ free choice as to whether or not to join a union is precisely what that legislation would destroy…. The actions of union mobs in Wisconsin, Ohio, and elsewhere give us a free home demonstration of how unions respect the rights of those who disagree with them, and how much they rely on harassment and threats to get what they want…. At one time, US Steel was the largest steel producer in the world, and General Motors the largest automobile manufacturer. No more. Their unions were riding high in their heyday, but they too discovered there was no free lunch as their members lost jobs by the hundreds of thousands. Workers have also learned there is no free lunch, which is why over the years, they have voted against unions in secret ballot elections.”

Of course Elon Musk does not like unions. He already knows they come with grave consequences.

This is one of the ethics that made Musk the greatest entrepreneur in history.

SOURCES

1. Miley, Jessica, Elon Musk Voted as One of The Best CEOs by His Employees, Dec 18, 2018.

https://interestingengineering.com/culture/elon-musk-voted-as-one-of-the-best-ceos-by-his-employees

2. Chazanoff, Seth, How does Tesla treat its employees? Why did it try to resist union organizing?

Quora.com, 2021.

3. Katz, Diane, The decline of the American labor union, April 28, 2023.

https://www.gisreportsonline.com/r/decline-american-union/

4. Sowell, Thomas, Why Elon Musk is right about Labor Unions, Thomas Sowell TV, YouTube, 2023.

https://www.youtube.com/watch?v=vbD0h2M8rho