Tesla, the classic auto industry outsider, may soon be dealing with an issue that has defined Detroit for decades. The San Francisco Chronicle reports that the United Auto Workers has set up an organizing committee at Tesla’s Fremont factory. UAW President Bob King also said in August that union representatives had met with CEO Elon Musk.
The Tesla factory was a union shop prior to 2010, when it was run by a joint venture of GM and Toyota. Unlike the auto industry however, the high-tech manufacturing hub of Silicon Valley has always been pretty much a union-free zone.
Given the history of struggle between the Detroit automakers and their unions, few observers see unionization as a good thing for Tesla’s bottom line. According to the Chronicle however, Wall Street analysts say it’s hard to predict how it would affect the California company. Some note that the UAW has recently emphasized collaboration over confrontation. “It’s not a foregone conclusion that this would be a contentious relationship,” said Andrea James, who covers Tesla for the Dougherty & Co. investment bank. “But while Tesla is in its ramping-up phase, the more freedom the company has to maneuver, the better.”
Musk’s opinions on the subject aren’t clear. When he announced the Fremont factory’s purchase from Toyota, Musk told the Chronicle, “On the question of the union, we’re neutral.” However, Tesla has described unionization as a “risk” to business in a financial report.
Musk’s informal approach to labor relations may or may not continue to work as the company evolves into a high-volume automaker. He told Wired in 2009, “Most of our experienced factory workers come from unionized environments, and we asked them what benefit did they see in unions. They said, ‘Well, if their boss was an asshole, they had recourse.’ I said, ‘Let’s make a rule: There will be no assholes.’”