Sunday, September 24, 2023
Hometalking numbersWhat unions would do to Tesla

What unions would do to Tesla

Labor unions now have their sights set on Tesla.

Bob King, president of the United Auto Workers Union, recently said his union is setting up an organizing committee at Tesla's Fremont, CA, plant. In August, King met with Tesla's founder, Elon Musk, saying he was "very open and said he would respect what the workers wanted. But his operating management has done the opposite. The operating management has taken a very anti-union stance."

According to CNBC contributor Gina Sanchez, founder of Chantico Global, unionization may make it more difficult for Tesla to deliver its rumored Model E. That line is expected to retail around $40,000, putting the electric car within reach of more consumers.

"Wages going up is going to be a challenge when Tesla is trying to deliver a lower-cost car," says Sanchez.

(Read: Service sector expands less than expected in December)

Workers at the Big Three automakers – General Motors, Ford, and Chrysler – earn an average salary of $60,000 per year, not including pension. But, that doesn't necessarily mean they earn more than Tesla workers. For example, a junior systems engineer at Tesla earns about $74,000, according to website

"If you look at the data, it's hard to compare autoworkers in Silicon Valley versus what autoworkers make in Detroit," says Sanchez. "Obviously, there's a huge cost of living difference."

Sanchez believes the effects on Tesla will be more than just on the company's costs.

"Generally speaking, it will increase costs and, quite frankly, change the culture," says Sanchez. "Tesla is more Silicon Valley than it is Detroit."

(Watch: Tesla Model X debuts in 2014)

What do the charts say about the future Tesla, unionization or no? Jeff Tomasulo, Managing Partner of Belpointe Alternative Investments, takes a look at the stock's charts to see what key levels are ahead for Tesla.

To see Tomasulo's charts and to see more of Sanchez's analysis on Tesla, watch the video above.

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