What's Going On With Tesla Stock Thursday?

Tesla Inc TSLA has informed its workers at the California car plant of pay increases for all U.S. production associates, material handlers, and quality inspectors, starting the new year with a "market adjustment pay increase." 

The report sent the stock prices down for the EV maker.

The company did not disclose the exact amount of the raise in the document that Bloomberg News viewed. This move follows similar pay increases by nonunion automakers like Toyota, Volkswagen, and Hyundai in their U.S. factories. 

The United Auto Workers (UAW) has been trying to organize Tesla and other manufacturers, aiming to double its membership, Bloomberg reports.

In the past, UAW's efforts to represent staff at significant car companies faced challenges, including rejections by workers at some companies and failure to reach a vote at Tesla and others. 

Also Read: Tesla Halts Merit-Based Equities For Employees This Year: Report

UAW President Shawn Fain attributes past failures to corruption within the union, cozy relationships with management, and unfavorable contracts. However, after achieving historic labor contracts with Ford, General Motors, and Stellantis last year, the union is determined to expand its presence, even targeting Tesla.

In January, a group of 33 senators urged Tesla and 12 other automakers to adopt a neutral stance in the UAW unionization efforts at U.S. auto plants. 

The senators significantly flagged the importance of neutrality agreements to respect workers' rights as these companies benefit from federal funds related to the electric vehicle transition. 

The letter also expressed concerns about alleged unlawful actions by management at various automakers to hinder unionization efforts.

In December, Tesla decided to boost the salaries of its hourly workers at Nevada Gigafactory. The EV firm has recently dealt with labor unrest, including a strike spread across several Scandinavian countries and criticism from the UAW union.

Tesla CEO Elon Musk has been critical of unions and emphasized cost-cutting, given the rising interest rates affecting electric vehicle affordability. 

This pay increase may impact Tesla's cost-cutting efforts, considering its substantial global workforce of approximately 140,000 employees, with around half in the U.S.

At the Fremont factory, which employs over 20,000 workers, employees have formed a UAW organizing committee. 

Tesla faced labor law violations during previous organizing efforts, as ruled by the National Labor Relations Board in 2021. The company has denied wrongdoing and is appealing the ruling in federal court.

In 2023, Musk stated that the company pays more than the demands of the UAW while also mentioning that performance expectations at Tesla are higher. 

Musk highlighted that some of the company's factory technicians working on the production line have become millionaires due to company stock grants. 

Tesla stock gained 85% last year, beating the broader index SPDR S&P 500 (SPY) at 21%.

Price Action: TSLA shares traded lower by 2.12% at $228.91 on the last check Thursday.

Also Read: Tesla Set To Expand Across India, Build $2B Factory, Elon Musk Expected To Visit

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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