In this article, I invite you to delve into the reasons behind the assertion that Tesla can emerge as the true winner from the battle of UAW vs GM, Ford and Stellantis, backed by data and analysis, and explore how the UAW strike might shape the future landscape of the automotive industry.
Yesterday afternoon Tesla investor and Future Fund's Managing Partner Gary Black wrote and social media platform X that "The real winner in the UAW strike will likely be the auto company that has been winning all along: $TSLA."
The real winner in the UAW strike will likely be the auto company that has been winning all along: $TSLA. With a non-unionized workforce and rapidly growing market share, $TSLA share price has increased +2,390% over the last decade versus +24% for $GM and +17% for $F. Source:… pic.twitter.com/rqE33TCXqo
— Gary Black (@garyblack00) September 17, 2023
Tesla's Unique Position
Gary Black's observation that Tesla is the real winner in the UAW strike is not unfounded. Let's dissect why Tesla is positioned to thrive in these turbulent times:
- Non-Unionized Workforce: Tesla boasts a significant advantage over traditional automakers like General Motors ($GM) and Ford ($F) due to its non-unionized workforce. While the UAW strike cripples legacy automakers' production and incurs substantial costs, Tesla's operations remain unaffected by labor disputes. This ensures smoother production and lower labor costs, two critical factors for any automaker's success.
- Rapidly Growing Market Share: Tesla's market share has been on a meteoric rise over the last decade. As electric vehicles (EVs) gain prominence in the automotive landscape, Tesla has consistently outpaced its competitors in EV sales. The UAW strike only serves to further disrupt the already struggling legacy automakers, giving Tesla an opportunity to capture an even larger share of the market.
- Vertically Integrated Supply Chain: Tesla's vertically integrated supply chain is another strategic advantage. By producing many of its components in-house, Tesla minimizes its reliance on external suppliers. This not only reduces vulnerability to supply chain disruptions but also enhances cost control, a crucial factor for profitability in the automotive sector.
Potential Implications of the UAW Strike on Tesla
While it's clear that Tesla has significant advantages over its unionized competitors, the UAW strike raises some intriguing questions about the future:
- Worker Compensation: As the UAW negotiates for improved wages and benefits, it's worth pondering whether Tesla's non-unionized workforce will seek similar concessions. If the UAW successfully negotiates favorable terms for its members, Tesla employees may also demand higher compensation, potentially affecting Tesla's cost structure.
- Competitive Edge: The UAW strike is undoubtedly costing legacy automakers billions of dollars and disrupting their production. These costs could further widen the gap between Tesla and its competitors. Legacy automakers will likely struggle to match Tesla's innovation and production efficiency in the wake of the strike.
- Impact on Legacy Automakers: The UAW strike is pushing legacy automakers into a corner. Higher labor costs and production disruptions are already straining their financial resources. To stay competitive, they may need to accelerate their transition to electric vehicles, a transition that Tesla has been leading for years.
In conclusion, Gary Black's assessment of Tesla emerging as the real winner in the UAW strike holds substantial merit. Tesla's non-unionized workforce, rapidly growing market share, and vertically integrated supply chain provide a sturdy foundation for continued success, while legacy automakers face mounting challenges.
However, the UAW strike also raises intriguing questions about the future of labor relations within the automotive industry and the potential impact on Tesla. As the strike unfolds, it will be essential to monitor how Tesla navigates these challenges while maintaining its position as an industry leader.
In the ever-evolving landscape of the automotive industry, Tesla's unique strengths make it a formidable contender, and the UAW strike might just cement its status as the auto company that "wins all along."
Armen Hareyan is the founder and the Editor in Chief of Torque News. He founded TorqueNews.com in 2010, which since then has been publishing expert news and analysis about the automotive industry. He can be reached at Torque News Twitter, Facebok, Linkedin and Youtube.
Chart Source: Creative Planning's Charlie Bilello on X.