Tesla to increase wages for hourly workers at Nevada Gigafactory in January, move could dampen union interest

Security gate in front of the Tesla Motors Gigafactory site east of Reno, Nevada.

David Calvert | The Washington Post | Getty Images

Tesla has informed workers at its Sparks, Nevada, battery factory that some hourly wage workers there will receive pay increases of about 10% starting in early January 2024.

According to internal materials seen by CNBC and workers at the plant briefed on “cost of living adjustments,” Tesla will increase its hourly wage base from $20 to $22 per hour at the low end and from $30.65 to $34. $50 per hour raises high quality. Additionally, some tiers will be streamlined, such as several tiers where workers now earn between $26.20 and $30.65 per hour will be adjusted to $34.50 per hour.

The adjustments also mean a raise of 10% or more for most hourly workers, increasing their hourly wage by between $2 and $8.30.

The wage increases could help Tesla fend off workers’ interest in forming a union and enforcing a collective bargaining agreement in Nevada. Tesla did not immediately respond to a request for comment on the increases.

After contentious negotiations and US labor strikes with General Motors, Ford Motor and Chrysler parent company Stellantis earlier this year, the United Auto Workers won record contracts. As CNBC previously reported, UAW President Shawn Fain has repeatedly said he plans to expand this fight from Detroit automakers to Tesla, Toyota Motor and other non-union automakers in the United States

In late October, workers at Tesla service and collision repair centers in Sweden sparked a walkout that has since spread to Denmark, Finland and Norway, involving workers working in shipping, waste management and providing other services to Tesla are. In recent weeks, one of Denmark’s largest pension funds announced it would sell its stake in Tesla shares as the US giant refused to reach agreements with unions.

The electric vehicle maker’s promise to significantly adjust the cost of living of workers at its Nevada Gigafactory also comes as Tesla faces increasing competition for talent and CEO Elon Musk stirs up controversy through public speeches and posts on X, formerly Twitter triggers others. the social media platform he acquired late last year.