Union organization pursues Tesla Motors Inc (TSLA)

Posted Jan 4, 2014

Currently the works at Tesla Motors Inc (NASDAQ:TSLA) do not belong to a union, which allows the company to be profitable. However, some employees at the company believe that there is not much work-life balance. What makes Tesla Motors different from other large manufacturers is their ecosystem and strong customer loyalty. The growing Tesla Supercharger network is strengthening the appeal of getting a Tesla vehicle.

The facility that Tesla Motors Inc (NASDAQ:TSLA) builds their vehicles used to be part of a union as part of a joint venture between General Motors and Toyota. The facility closed in 2010 and was not put under a union when Tesla moved in. According to SFGate, the United Auto Workers union has expressed interest in organization the Tesla Motors Inc (NASDAQ:TSLA) plant. UAW President Bob King recently reported that the union set up an organizing committee at the factory. Representatives of the union also met with Tesla Motors CEO Elon Musk this past August.

Unions have been wanting to influence Silicon Valley companies and workers for a while now, but they cannot get a vote at most of them. As the head of the union, King has been able to emphasize the UAW’s collaboration with automakers instead of a confrontational approach. However, there are some analysts that believe that there would be an increase in labor expenses. Elon Musk has been vocal about running his company differently from other automakers, but setting up unions would be a step towards becoming the companies that he has made fun of.

In terms of a unionization stance, Elon Musk told the Chronicle that he was neutral about the “question of the union.” However, Tesla Motors listed the possibility of a union as a “risk” to the business in their last annual financial report.

“The mere fact that our labor force could be unionized may harm our reputation in the eyes of some investors and thereby negatively affect our stock price,” stated the report. “Additionally, the unionization of our labor force could increase our employee costs and decrease our profitability, both of which could adversely affect our business, prospects, financial condition and results of operations.” King said that Musk may be open to the idea, despite other Tesla managers being opposed to the idea.

There are employee reviews of Tesla posted on websites like Glassdoor. Some of the employees said that they love working there, but others say that the company moves at a fast pace with long hours. Employees that are considering a job there are told that there is a lack of a work/life balance. Employees also say that the pay is average for the type of work. Manufacturing engineers make around $91,100, which is higher than the engineers at the automotive companies in Michigan. But the cost of living in Silicon Valley is much higher.

Art Pulaski, a chief officer of the California Labor Federation (AFL-CIO), told SFGate said that the union culture is not necessarily incompatible with Tesla Motors. Many of the workers that worked in the factory before Tesla purchased it have experience in building solid cars at a rapid pace. They were also part of the same union that is looking at Tesla.

What are your thoughts about Tesla unionizing? Let us know in the comments section.