Tesla has announced that it will raise factory worker pay for some workers at its Nevada Gigafactory by 10% or more. The news comes not long after UAW’s historic strike wins, in which it earned 25% pay increases at all of the Big Three American automakers.
After VW, Hyundai, Toyota, and Honda did the same recently, this shows how union wins tend to affect entire industries, raising conditions for even nonunionized companies who have to compete for workers.
CNBC reported that Tesla internal documents confirmed that workers at the Gigafactory will receive “cost of living adjustments” of between $2.00 and $8.30 per hour, with raises of 10% or more for most hourly workers at the plant. It will also “streamline” wage tiers and reduce the differences in pay between them.
These are two major points of the UAW negotiation, which not only sought raises but also cost-of-living adjustments (which UAW gave up as part of negotiations after the 2008 financial crisis and only just got back in this year’s negotiations) and the elimination or reduction of tiered pay structures. CNBC’s report doesn’t state whether Tesla’s timelines have been made shorter, but the wage progressions will be compressed to have fewer tiers.
Tesla is currently in the sights of UAW as a potential target for unionization. But UAW is not the only union targeting Tesla. The automaker is currently facing a strike from workers in Sweden as the nation’s largest industrial union, IF Metall, wants Tesla to sign a collective bargaining agreement (an agreement the likes of which 90% of Swedish workers are covered). This strike has been gradually expanding via sympathy strikes over time.
The new pay raises will take effect starting January 2024, just two weeks from now.
Other companies have also raised pay
Tesla’s raises aren’t the only similar recent announcement from a nonunionized company.
Last month, Volkswagen of America announced that it would increase wages in a press release. It was pretty light on details but said that the wage increase would start in December and that a compressed wage progression timeline would begin in February.
Volkswagen of America annually evaluates compensation for our production team members at the end of the year to ensure we continue to offer a competitive and robust compensation package designed to attract and motivate employees who make our daily operations possible at the plant.
Prior to that, Hyundai announced a 25% pay increase for nonunionized workers by 2028, matching the headline 25% gain that UAW won in its negotiations. Hyundai COO Jose Munoz said, “Hyundai continuously strives to maintain competitive wages and benefits commensurate to industry peers.”
Also, Honda raised the wages of some workers by 11%, along with a faster progression to the top of the wage scale and additional benefits like child care and student loan help. Honda said it “continuously reviews our total rewards packages to ensure we remain competitive within our industry.” The company also said, “We will continue to look for opportunities to ensure that we provide an excellent employment experience for Honda associates.”
And Toyota took the opportunity to hike the pay of most of its US assembly workers by 9.2% immediately after the UAW deals were announced. After Toyota’s pay hike, UAW President Shawn Fain recognized that it was a response to his union’s new contract, saying, “Toyota, if they were doing it out of the kindness of their heart, they could have chosen to do it a year ago.”
The “UAW Bump”
Fain called these wage increases “the UAW bump” and said, “UAW, that stands for ‘U Are Welcome.’”
UAW wants to maintain this momentum and has openly stated that it wants to unionize more nonunionized companies in the US. In UAW’s original strike victory announcement, Fain said that it plans to come back to the bargaining table in 2028 on May 1, otherwise known as May Day or International Workers’ Day, but that time, it “won’t just be with a Big Three, but with a Big Five or Big Six.”
At the time, he didn’t specify who exactly those extra two or three companies would be, but later, we found out when UAW launched a campaign to unionize the entire auto industry at once. So perhaps UAW is aiming for even more than a Big Five or Big Six at this point.
Much of union popularity has been driven by COVID-related disruptions across the economy, with workers becoming unsatisfied due to mistreatment (labeling everyone “essential,” companies ending work-from-home) and with the labor market getting tighter with over 1 million Americans dead from the virus and another 2-4 million (and counting) out of work due to long COVID.
Unions have seized on this dissatisfaction to build momentum in the labor movement, with unions striking successfully across many industries and organizers starting to organize workforces that had previously been nonunion.
Announcements like these show how high union membership has a tendency to improve working conditions for every worker and why the US has had gradually lower pay and worse conditions over the decades since union membership peaked. It’s really not hard to see the influence when you plot these trends against each other.
It’s quite clear that lower union membership has resulted in lower inflation-adjusted compensation for workers, even as productivity has skyrocketed. As workers have produced more and more value for their companies, those earnings have gone more and more to their bosses rather than to the workers who produce that value. And it all began in the 80s, around the time of Reagan – a timeline that should be familiar to those who study social ills in America.
Conversely, these raises show the impact that unionized workers can have, not only for their own shops but for nonunionized workplaces as well. If workers gain a big pay increase in one part of an industry, all of a sudden, workers at other companies might start thinking they want to jump ship, maybe move over to another company where they can get better pay or better conditions. To retain workers, companies then need to raise wages.
In addition, nonunionized companies may want to keep their employees nonunionized and thus see the pay raises as a way to satiate their employees into maintaining the status quo. If workers at Toyota see that UAW workers are getting huge pay increases and lots of additional benefits, maybe they’ll think that UAW can bring them the same benefits and start talking about unionizing.
Companies generally think they should avoid having a unionized workforce because a unionized workforce means more pay for workers, which to them means less pay for the executives and shareholders making the decisions. So they’ll offer whatever carrots they can to keep workers from organizing to have their voices heard collectively. Individually, workers have little influence over what their pay and conditions should be.
All of this isn’t just true in the US but also internationally. If you look at other countries with high levels of labor organization, they tend to have more fair wealth distribution across the economy and more ability for workers to get their fair share.
We’re seeing this in Sweden right now, as Tesla workers are striking for better conditions. Since Sweden has a 90% collective bargaining coverage, it tends to have a happy and well-paid workforce, and it seems clear that these two things are correlated. And while that strike is continuing, meaning we haven’t yet seen the effects of it, most observers think that the workers will eventually get what they want since collective bargaining is so strong in that country.
These are all reasons why, as I’ve mentioned in many of these UAW-related articles, I’m pro-union. And I think everyone should be – it only makes sense that people should have their interests collectively represented and that people should be able to join together to support each other and exercise their power collectively instead of individually.
This is precisely what companies do with industry organizations, lobby organizations, chambers of commerce, and so on. And it’s what people do when sorting themselves into local, state, or national governments. So naturally, workers should do the same. It’s just fair.
And it’s clear that it helps – so even if you aren’t unionized yourself or have a job that doesn’t lend well to unionization, you should probably be happy about other union efforts since they tend to buoy entire economies for the people who are creating the value in the first place – the workers.
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Greenworks’ latest 60V cordless chainsaw delivers performance that rivals many gas models, but without the harmful emissions or annoying pull cord. Whether dropping saplings, pruning thick limbs, or clearing up trails after a storm, this battery-powered tool is ready to work.
First released at last year’s CES show in Las Vegas, Greenworks’ 60V li-ion battery packs enough power for 100 clean cuts of the saw’s 16″ blade, and its lightweight, 12.5 lb. frame, tool-less chain tensioner, and automatic oiling system come together for convenient maintenance and easy-to-control power.
When it’s time to get to work, the chainsaw’s brushless electric motor can spin the chain at more than 10,000 rpm with (the company claims) about 20% more torque than a 42cc gas chainsaw for fast, confident cuts through hard woods while keeping noise and vibration to a minimum.
That low-noise and fume-free operation makes Greenworks’ chainsaws an upgrade for both the operator and the neighborhood.
“Greenworks is proud to offer comprehensive battery-powered solutions for everyone, from homeowners and outdoor enthusiasts to major commercial landscaping contractors,” Klaus Hahn, Greenworks’ President, explained at its launch. “These innovations further our company’s vision of building a more powerful future with clean energy, and they illustrate our tagline ‘Life. Powered. By Greenworks.’”
Greenworks 60V chainsaw specs
up to 100 cuts on a single charge with the included 2.5Ah battery on 4×4 wood
20% more torque and faster cutting than a 42cc gas chainsaw
no prime, no choke, no pull with no aggravating pull cord
2.0 kW (2.7 hp) max output
brushless motor provides more power, longer run-times, and extended life
The Greenworks 60V 16″ brushless cordless chainsaw, a 2.5Ah battery, and charger are available online for $299.99 – but it’s on sale for “just” $189.99 (or $192.49, with the 18″ arm) on Amazon through September 18th.
If you needed another reason to check it out, the company claims using the electric chainsaw instead of a gas unit saves as much carbon emissions as driving 11,000 miles.
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Heavy mineral and metals mining is one of the dirtiest industries on the planet, but Chinese equipment giant XCMG doesn’t think it has to stay that way. To prove it, the company has unveiled a sweeping pledge to electrify and decarbonize mining — and they’re dragging over 100 global partners with them.
Along with with 107 global industry partners from 26 countries, Chinese equipment brand XCMG has issued a Joint Declaration on Global Zero-Carbon Smart Mining, aiming to electrify, automate, and otherwise decarbonize international mining. The pledge addresses 12 key areas including electrification, autonomous operation, net-zero emissions, circular economy, technology sharing, international cooperation, and smarter maintenance strategies.
“As a global leader in zero-carbon smart mining solutions, XCMG is committed to addressing industry bottlenecks through integrating new energy equipment, intelligent control systems and full-lifecycle services,” said Yang Dongsheng, chairman of XCMG Group. “We have resolved the four core challenges of energy infrastructure, new energy equipment portfolios, smart mining management systems and financial support, aiming to help our customers achieving both business growth and environmental wins.”
It’s always great to see efforts like this to decarbonize. But those efforts mean millions of new equipment assets to replace the millions of existing diesel assets deployed currently.
With a strong hand in the autonomous haul truck race and ultra-competitive pricing to back their electric plays, it seems like XCMG is about to get serious as it expands its reach into the Western world. It’s no wonder the legacy brands are running scared and hiding behind the bogus “messy middle” propaganda!
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European automakers asked the EU Commission to review and potentially modify the bloc’s 2035 all-EV target at an auto summit on Friday, but the commission is reportedly standing firm despite the industry’s big push this week for more leniency.
In 2021, Europe announced a target to go all-electric by 2035. It was part of a greater package of climate reforms designed to target a 55% reduction in CO2 emissions by 2030 and full climate neutrality by 2050.
But a lot has changed since then. European EV sales and market share have continued to rise, but even more importantly, Chinese EV sales have accelerated rapidly… much faster than those in Europe. In 2020, Europe had 11% plug-in (BEV + PHEV) market share and China was at 5%; but in the interim, China leapfrogged Europe by hitting 47% plug-in share in 2024, while Europe only reached 24%. BEV-only numbers are lower, but BEVs still outsell PHEVs significantly.
This has been accompanied by a significant rise in Chinese EV exports as well. As China’s EV manufacturing effort ramps up rapidly due to forward-looking industrial strategy and encouragement of EV startups, the country has started to produce advanced EVs so cheaply that slow-moving Western automakers are finding it hard to compete (after putting in little effort to do so).
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And so, what are the automakers to do? They’ve already tried nothing, and they’re all out of ideas. So they’re doing what they usually do: going to the teacher to beg for an extension.
Automakers make a final push for leniency on EU emissions
Friday’s auto summit was reportedly the third and last “crisis meeting” between automakers and the EU Commission, timed at the end of the largest European auto show, IAA Munich. Automakers and some governments spent the week agitating for leniency on CO2 targets and to extend the life of the internal combustion engine.
The argument is that automakers don’t have enough time to get up to 100% EV sales by 2035, having only advanced from 11%->24% between 2020 and 2024. But despite automakers’ protestations, China’s move from 5%->47% in the same time frame shows that a lot more is possible than European automakers are letting on.
The review comes after Europe already loosened rules for automakers earlier this year. In March, the Commission gave automakers “breathing room,” slightly extending the deadline for emissions compliance for the 2025-2027 model years (which they now seem on track to meet).
Ironically, this “breathing room” for automakers would result in less “breathing room” for actual humans with lungs, who will have to breathe more pollution as a result of the automakers’ inability to stop poisoning everyone.
Despite that Europe is reportedly standing firm on its targets, it may offer some minor flexibility in its review.
What form the reviewed targets might take is not yet clear. But some automakers and government entities like Germany’s CDU (whose leader, Friedrich Merz, said the auto industry should “not limit itself to a single solution”) are asking for “solutions” that still rely on combustion, and extend the lifespan of polluting, complex and wasteful gasoline engines.
EU President Ursula Von der Leyen reportedly says that the EU will hold firm, but did not rule out potential exceptions for plug-in hybrid vehicles with primarily use electricity but have a combustion engine as a fallback.
While synthetic “e-fuels” created from renewable electricity are principally carbon-free and are obviously better than fossil-based fuels, internal combustion engines are still desperately inefficient, with 20-30% efficiency, as compared to ~90% efficiency for electric motors. Putting that electricity directly into a BEV is a far more efficient way to convert electricity to motion than using the electricity to create synthetic fuels, then shipping and inefficiently combusting those fuels.
For biofuels, which are also carbon neutral, the land and water required is an order of magnitude larger than what’s needed for renewable electricity sources used to fuel electric vehicles. In order to fuel all the world’s cars with biofuels, we would need about twice as much land and rainfall as is available on Earth.
And while it’s nice to think that all these combustion engines might suddenly convert to using biofuels, that seems unlikely to happen. So, continuing to build these engines means they will continue to combust things that, mathematically, must remain underground and uncombusted.
Meanwhile, climate change continues to accelerate as human emissions continue to rise. This is the largest and objectively the most important challenge that humanity has ever created for itself, and one that Europe needs to confront boldly.
Finally, one auto CEO speaks the truth
Thankfully, somebody pointed out the ridiculousness of this debate.
“I don’t know of any better technology than the electric car for advancing CO2 reduction in transportation in the coming years. But even apart from climate protection, the electric car is simply the better technology,” said Döllner, who said that the constant debates over whether inferior combustion engines should be preserved are “counterproductive and unsettle customers.”
Meanwhile, Mercedes CEO Ola Källenius, who also heads the European Automobile Manufacturer’s Association (ACEA), went exactly in the wrong direction with his comments, saying that “hybrids and efficient high-tech combustion engines should remain part of the way forward, otherwise we risk acceptance and jobs.”
The actual reality of the situation is that Europe will lose jobs if it fails on the EV transition… which it alreadyis, and will fail even harder with the complacency that Källenius and Merz have asked for. Doubling down on combustion will result in failure in the face of superior competition from overseas.
At least one CEO, Döllner, actually seems to get it. Although, he did become CEO shortly before Audi tamped down on its EV push, so maybe he needs to listen to his own words.
An unnamed European official, quoted by Euronews, also injected some reality into the situation. After Friday’s talks, the person said “even if the Commission took down these targets, global competition would set them for the industry,” recognizing that superior Chinese EVs are already out-competing European brands and that competition may result in change regardless of any futzing about the automakers beg the EU to do.
A retreat would surrender to Chinese competition
The current situation in Europe involves rising competition from the aforementioned Chinese EV exports. While Chinese share of European EV sales is still rather low at around 11%, that share has been growing rapidly. And it’s growing because, despite the tariff Europe levies on Chinese EVs, these cars still offer quite a good value proposition, and some have better software features than those available from slower-moving traditional automakers.
This is one thing that has European automakers scared about the EV transition. But instead of recognizing that they are behind and need to catch up, they are falling back to the default mode for large businesses – begging government to slow things down so that they can maintain their dominant position. But that hasn’t worked before, and it won’t work now, and thankfully Europe seems not to be taking the bait.
The only way that European automakers can confront the rising challenge from Chinese EVs, and work to solve climate change which their products are the largest single cause of, and which the transportation industry specifically is not doing enough to fix, is by committing more seriously to the EV transition, not by begging the government to let them move more slowly.
Notably, the same sort of begging is not happening in China. When new regulations threatened to destroy the market for ICE cars in China and leave millions of cars unsellable, Chinese auto dealers did ask for a reprieve… but only for six months, in order to sell off existing inventory, while also calling on all levels of industry and government to take the EV transition more seriously, rather than asking anyone to pump the brakes on it.
And none of these Chinese EVs are having any trouble with emissions limits, either. They are not poisoning the lungs (and every other organ) of Europeans – that’s being done by the combustion engine makers.
The only answer is to accelerate, not decelerate
All the above said, Europe’s target probably should be reviewed… because 2035 is not early enough. The faster we work to confront climate change, the better. No matter how expensive it seems it might be to solve the problem that we collectively have spent the last century and a half causing (and have supercharged in the last 30 years), that cost will only get higher as time goes on and as more damage is done.
Many studies have pointed out that the faster we solve this problem, the cheaper it will be to fix, so every moment lost as a result of the auto industry begging for more time only represents more cost, death, and disruption for humanity and for all species on Earth.
Lobbying to slow down the transition therefore does not just harm European industry, but also would harm all life on Earth. And, as Audi’s CEO pointed out, debate over the simple truth of electric drive’s superiority is counterproductive. The European Commission is right to hold firm on its targets, and should rebuff any further pleas to weaken them from the auto industry, the very industry that got itself, and all of us, into this problem in the first place.
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