WASHINGTON —The Teachers/AFT are taking on Elon Musk. But interestingly enough, the union’s problem—at least in letters it’s dispatched to major investment funds—is not Musk’s politics or his domination of Donald Trump, but the tanking stock value of his flagship, Tesla, thus damaging Teachers’ pension portfolios.
Union President Randi Weingarten wrote to big institutional investors whose pension fund holdings are in Tesla, saying the company’s price has crashed so fast and so far it makes a big dent in the investment returns the union expects.
Her letters to the investment firms—T. Rowe Price, TIAA-CREF, Fidelity, Vanguard, State Street and Black Rock–stop just short of demanding they, on behalf of the pension funds they manage for union workers, dump Tesla. The letters call instead for the firms to “review” their Tesla holdings and share with AFT their justification for keeping the stock. Then the letters give many reasons not to do so.
One big one, though buried in the letters: Musk, the “brand” and “face” of Tesla, has become toxic to buyers, though they don’t say why. Independent stock analysts do.
Due to his jihad against federal workers, programs and the government, a quarter of all Americans surveyed told JW Surety Bonds in December they “avoid Tesla’s technology due to their opinions on Elon Musk” and, social media adds, “his highly abnormal involvement in U.S. politics.”
Instead, Weingarten’s letters to the investment banks that hold teachers’ pension money stick to the numbers—and the numbers for Tesla stink.
“The AFT represents 1.8 million education, healthcare and public sector workers, many of whom depend on your firm to protect and prudently grow an estimated $4 trillion of retirement security assets, both individually and through pension funds and other collectively managed retirement security vehicle,” Weingarten opens her letter to Robert Sharps, CEO of T. Rowe Price. The other CEOs received identical letters.
Those investments are now “at risk of devaluation” as the stock price has crashed in just six weeks from $489 per share to $290.80 and is headed towards a “target price” of $135. That causes billions in losses for the teachers’ pensions and puts some of the smaller pension funds at risk, Weingarten says.
Weingarten notes one reason for the stock price decline is declining EV sales in two key markets, California, down 8%, and Europe, particularly Germany, where sales dropped 60%. And “a consortium of major automakers—including Mercedes, BMW, General Motors, Stellantis, Honda, Hyundai and Kia—has launched IONNA, a rival charging network,” with a planned 30,000 electric vehicle charging stations by the end of this decade.
In her sole reference to Musk’s outsized control of Trump, Weingarten notes the Tesla boss is now “an unpaid employee” of Trump, which understates his real clout. Musk has become infamous for taking a chainsaw, literally, to federal workers, firing more than 100,000, sidelining even more probationary workers and threatening wholesale massacres of jobs by mid-March.
Says it hurt Tesla’s “brand”
Weingarten says all this hurt Tesla’s “brand.” Picket lines over the firings, not over Tesla’s and Musk’s labor law-breaking, have sprung up in front of Tesla dealerships from California to Maryland. And Wall Street stock analysts now rumble that Musk’s name is “toxic” to investors. Musk’s pet, Trump, has been toxic to U.S. investment banks for years.
“According to the American EV Jobs Alliance, EV swing consumers—those open to EVs once costs drop—view Musk negatively, making customer expansion even harder,” Weingarten adds. Which, of course, bolsters Weingarten’s critique and challenge to the investment firms which keep holding Tesla stock—and which keep Musk’s corrupt, law-breaking corporate empire, going.
But the federal government also feeds millions to Musk. Even as Musk fires federal workers, Tesla and SpaceX reap millions of dollars in federal contracts, especially from NASA and the military. More than 100 House Democrats, led by Reps. Ilhan Omar, DFL-Minn., want Trump Attorney General Pam Bondi to investigate potential conflicts-of-interest involving Tesla and those agencies.
And Rep. Mark Pocan, D-Wis., a Painter and a member of the House Appropriations Committee, has introduced legislation to ban all federal contracts to Musk’s enterprises.
None of these more recent instances of Musk’s clout and corruption, both of which are common features of the corrupt corporate capitalist system, were in the AFT’s letters to the big investment houses. They hadn’t been revealed before the stock started to tank.
”The signs are growing J.P. Morgan was correct when its analyst recently wrote Tesla shares ‘continue to strike us as having become completely divorced from the fundamentals,’” Weingarten wrote.
In plain English, that means investors aren’t getting their money’s worth from Tesla.
Weingarten wrote Tesla’s income slid 23% year-over-year in the fourth quarter of 2024, and profits dropped 71%. “These are not isolated incidents but rather a troubling pattern that suggests Tesla’s pricing power is eroding, leaving it vulnerable to market fluctuations and increased competition.
Weingarten also questioned Musk’s outlandish compensation package. The chasm between compensation for CEOs and that of median-income workers in the U.S. has been a scandal of corporate capitalism for at least the last 50 years and it rivals the canyon between Gilded Age robber barons and their workers.
Musk’s pay package, approved by his rollover board, is $56 billion, which sets an all-time record.
This is “a dilution in shareholder value worth approximately 5% of Tesla’s current market value,” wrote Weingarten. In an indication Tesla’s board is as beholden to Musk as Trump is, the board chair defended Musk’s request by citing “fairness and respect require we honor the collective commitment we made to Elon—a commitment that was, and fundamentally still is, about retaining Elon’s attention and motivating him to focus on achieving astonishing growth for our company.”
Which, according to the numbers, he isn’t. That hurts the investments the workers’ pensions, through the investment firms, have in Tesla stock.
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