Tesla Europe in the news … again

The Economist (Nov 30 2023) highlighted a small strike in Sweden as the start of a major conflict of cultures and drew parallels with Tesla’s approach to labor relations in Germany.

“Elon Musk, boss of Tesla, has gone to great lengths to keep unions away from his electric-car maker’s 127,000 workers at its “gigafactories” in America, China and Europe. Even in Germany, land of harmonious relations between workers and bosses, the powerful metalworkers’ union, IG Metall, has no say at the company’s local plant in Grünheide, near Berlin. Mr Musk’s latest challenge—a strike by some 130 mechanics at ten Tesla service workshops in Sweden—looks like a trifle. But it may yet prove consequential.”

The strike spread to Tesla workers and suppliers across Sweden and into Norway and Denmark and continues, involving postal workers, dock workers and cleaners. Tesla’s approach is not just unpopular with trade unions. Many Swedish employers and the government accuse the company of insensitivity and putting at risk a Swedish model of constructive employee relations that has lasted for more than 100 years. The New York Times described the conflict as a “Culture Clash” between US and Swedish ways of doing business.

In Germany, IG Metall said “What’s going on in Sweden is encouraging for us”. It claims that Tesla’s German workers are paid a fifth less than those at carmakers covered by the industry’s collective wage agreement. The union set up an office near Grünheide to win Tesla employees over and one of its first acts was contesting the works council election in March 2024. The prior works council was established before the company engaged in large scale manufacturing operations. With a small and largely non-blue-collar workforce the works council had no trade union presence. The works council chairman publicly opposed claims for collective bargaining saying that Tesla workers were “better off on their own.”

The elections took place from March 16-18 and IG Metall took 16 of 39 seats. Tesla will need to manage the works council sensitively to assure that employees are engaged in decisions that affect them and do not give the unions the opportunity to build support.  Employee communication will be crucial.

Tesla may not like trade unions, but the future will depend on their ability to love their works council.