President Joe Biden on Thursday said he supported unionization at Tesla, Inc. TSLA and Japanese auto giant Toyota, Inc. TM while addressing United Auto Workers union in Belvidere, Illinois.
Commenting on his statement, Silicon Valley Entrepreneur David Sacks, who is also a friend of Tesla CEO Elon Musk, said the president is trying to push businesses into “some archaic view of the past.”
What Happened: The president’s comments weren’t surprising, said Sacks while appearing on CNBC’s Last Call. “He of course he wants Tesla and Toyota and every other company in the world to be unionized,” the venture capitalist said.
“He’s probably the most union capture president we’ve ever had,” he added.
Sacks also recalled that the White House did not invite Tesla for the EV Summit it hosted. The snub was due to the fact that Tesla is not a union shop, he said, adding that the president chose to give credit for starting the EV revolution to companies such as General Motors Corp. GM. This is “just silly,” he said.
The reason for Tesla being so innovative is its non-unionized nature, which gives the flexibility to implement its vision in a more flexible way, Sacks said. “And so you have to really ask yourself whether what by the agenda Biden pushing here is actually going to make American business more competitive or does it trap it in some archaic view of the past,” he said.
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Tesla Bear Retorts: Sharing the video clip of Sacks’ comments, Tesla bear Gordon Johnson said by “archaic vision of the past.” the venture capitalist meant when the middle class could raise their family via a Union job and pay. The GLJ Research analyst noted that Tesla workers make $34,084 per year on average, based on data from Tesla’s 2022 proxy filing.
In comparison, GM and Ford Motor Co. F employees make $120,000, he said.
“@DavidSacks is just another ‘rich man north of Richmond’ who spits on the working man,” Johnson said.
When one of X users differed and said unions only serve to raise red tape and stifle innovation, Johnson said, “This is one of the biggest lies told by tech investors who have NO IDEA how the auto industry works.”
The analyst said Ford and GM will cut elsewhere, add content so that the extra labor costs. The automakers will add high-margin software-based content to vehicles, offsetting the pay raise, he said.
Tesla ended Thursday’s session down 5.46% at $209.98, according to Benzinga Pro data. The weakness was in part due to HSBC initiating the stock with a Reduce rating and $146 price target. GM and Ford fell 3.30% and 3.48%, respectively, before ending at $26.65 and $9.70, respectively.
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