- The Joe Rogan Podcast/YouTube
- Following GM’s decision to close a number of its production centers in North America, Morgan Stanley says Tesla could takeover some of the closing factories as it increases its staff count.
- Tesla could serve as a “white knight” for threatened manufacturing jobs in the US, particularly in Ohio.
- Morgan Stanley sees a huge PR benefit for Tesla from any move that saves under pressure jobs.
Tesla could move to pick up one of GM’s soon-to-be redundant factories in Ohio aiding US manufacturing and the company’s future, according to Morgan Stanley.
The bank sees the opportunities left behind by GM as the potential next step in Tesla’s expansion. GM’s decision to cut around 14,000 jobs last month was criticised by President Donald Trump despite the company previously stating his tariffs would lead to job losses.
Tesla has a history of taking over unused plants, such as the former Toyota and GM NUMMI plant in Fremont, California, and Morgan Stanley says the company will need far more production capability and staff moving forward. The bank estimates Tesla’s current 40,000 employees will reach 50,000 by 2020, 72,000 by 2025 and 92,000 by 2030 with thousands needed in the coming years.
There is a potential cost saving benefit for Tesla in moving to Lordstown, Ohio given few places have a pre-existing labour supply and infrastructure that could adapt to the fast growing electric vehicle maker.
In a recent 60 Minutes interview on CBS, Elon Musk was asked if Tesla could buy one of the GM plants slated for closure.
In response, Musk said: “It’s possible that we would be interested. If they were going to sell a plant or not use it that we would take it over.”
Musk’s comments drew the attention of Ohio’s Governor John Kasich who tweeted the Tesla CEO suggesting he should get in touch.
To make the deal viable for shareholders, Morgan Stanley says there are three essential criteria for Tesla to hit. Namely, that there is “a free (or nearly free) cost to acquire the plant, a labor contract that does not involve a traditional UAW/collective bargaining agreement (like their current Fremont, CA plant), extension of the $7,500 Federal tax credit for the purchase of EVs or other incentives to encourage the early adoption of EV technology.”
Investors could be cautious about the profitability of such a move especially with labor union disputes a possibility, but notes that any job-saving move would be a great PR opportunity for Musk’s company. Tesla has been in the news for Musk’s often erratic habits such as smoking weed during an interview and infamously tweeting that funding was secured for the company, a move which led to a lengthy spat with the Securities and Exchange Commission.