The big winner of the auto workers' strike - Tesla

If the United Auto Workers (UAW) does launch a strike, Detroit's "Big Three", which is transitioning to electric vehicles, will suffer, and Tesla may become the biggest winner in this labor dispute.

Tesla, which has resisted unionizing its U.S. factories for years, has helped it expand its first-mover advantage in electric vehicles, and it is likely to be "the winner of this labor bargain," Gene Munster, managing partner at asset manager Deepwater Asset Management, said in a note Thursday.

UAW's contracts with Ford, GM and the Stellantis Big Three expire at 11:59 p.m. ET on September 14, just three hours away, but the positions of the two sides are still very divergent. If negotiations fail, the union will launch a "stand-up" strike at midnight to shut down some unidentified factories. The UAW also said it would not extend existing contracts.

Munster said:

The automakers are already in trouble when it comes to the electrification of their businesses, and the current UAW negotiations will eventually lead to a sharp rise in costs, further pushing them into losses.

Ford offered a 20 percent pay rise over the four-year term of the contract, compared to 9 percent in its previous proposal; GM recently proposed an 18% salary increase; Stellantis' proposal is 17.5 percent. UAW wants a salary increase of about 36 percent over the duration of the contract, compared with the 46 percent annualized compound rate originally proposed.

Munster said Detroit's "Big Three" already pay workers 38 percent more than Tesla, a gap that could widen further if workers strike.

It is worth mentioning that Ford, GM and Stellantis have struggled to make electric vehicle profits. For example, GM's decision to discontinue production of the Bolt EV was partly because the compact electric car was too thin-margined. To address this, GM decided to reproduce the Bolt later using a shared EV architecture to improve profit margins.

Moody's also pointed to the Big Three's woes on the road to electric vehicle transition, saying in a recent note that while all three automakers have ample liquidity to respond to strikes, long-term labor action could hamper their EV ambitions.

Moody's said that while workers are unlikely to get the big raise they want, the new UAW contract could increase their wages by up to 20 percent.

Moody's also said the strike could also affect the plans of the three major automakers to expand electric vehicle production. GM, for example, plans to produce about 100,000 electric vehicles in the second half of the year, double the production in the first half. The point is that the strike could affect the production of GM's electric models introduced over the past 18 months, which have so far been produced very little.

In addition, Ford plans to produce 100,000 vehicles a year in the fourth quarter, compared with 24,000 units in the first quarter, according to its best-selling electric pickup truck, the F-150 Lightning.