Government Wants to Subsidize Unions in the Auto Industry

by | Dec 8, 2021 | Auto Manufacturing, News


The auto industry continues to recover from the double whammy of sluggish sales followed by a dire semiconductor shortage, and Congress’ still-in-progress Build Back Better legislation complicates matters. Multiple versions of the act include electric-vehicle tax incentives geared towards unionized auto manufacturers; these incentives would clearly benefit Detroit’s Big Three (General Motors, Ford, and Stellantis) through the union requirement while leaving Tesla out in the cold. The puzzler there, of course, is that Tesla remains the largest EV seller yet could be effectively penalized by the Biden administration for being a union-free workplace. (Not incidentally, Biden’s August EV summit also snubbed Tesla while inviting the Big Three). During this week’s Wall Street Journal conference, Musk fielded questions about the Build Back Better Act, which is still moving through the Senate and currently includes those tax incentives for EVs built by union members. The bill now includes a lesser amount (which simply reinstates a previous tax credit discontinued in 2019) for Tesla, and Musk took a surprising stance. He pushed back while declaring that no EV manufacturers (at all) should receive federal funds, given the ballooning federal deficit. Musk’s rhetoric is growing as heated as lawmakers debating this legislation, which is not the only example of potential federal overreach here. In early 2021, the NLRB ruled that Musk must delete a 2018 tweet (although he apparently did not delete it), which suggested that employees would lose stock options if they unionized. He did, however, state that his employees are free to unionize if they so desire; he also clarified his belief that the UAW would be the guilty party in taking stock options away. Further, Musk confirmed a CNBC report about Tesla workers making more money than union workers at GM. Meanwhile, Tesla’s avoidance of unions, thus far, may not last forever, at least internationally. Over in Berlin, Germany, the country’s largest union, IG Metall, recently expressed intent to organize Tesla employees at a plant that will employ 12,000 workers. Stay tuned on that note.

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