Tesla’s Global Union Avoidance Strategy Faces Problems in Sweden

Telsa is facing strikes from its own workforce and workers in other related industries in Sweden highlighting the shortcomings of a one-size-fits-all global union-avoidance strategy.

Tesla could have avoided a direct negotiation with local union IF Metall in Sweden by joining the employers' association, automatically making the company covered by a sector-wide collective agreement. However, it neither joined the employer’s association nor recognized the local union, as part of its global strategy of refusing to recognize unions “anywhere in the world.” In Sweden, once a company is outside the employers’ association, unions are free to demand separate collective bargaining as well as engage in tactics to pressure the company, such as strikes. As many other U.S. companies have found over the years, such a position is hard to sustain in countries that have a deeply ingrained pro-labor culture and a supportive political environment that crosses left/right divides.

Tesla is now facing widespread strikes from both its own workers and other groups throughout Sweden in solidarity with Tesla employees. Port workers blocked the unloading and loading of Tesla cars on Tuesday in the entire country after the company switched ports, while cleaners and electricians threatened to join the strike against the company. A local taxi company has also paused its new purchases of Tesla vehicles. So far, neither Tesla nor the workers on strike are backing down, and it appears that eventually, the company will either relent on its union policy or exit the Swedish market. 

Meanwhile, the automaker is also under union pressure in Norway, Germany, and the United States. In the U.S., the UAW, fresh off a major victory against the Big Three automakers, has set its sights on Tesla and the EV market in general. While Tesla has avoided union campaigns in the U.S. in the past, the UAW is likely following the situation in Sweden closely and may look to capitalize in the U.S. should Tesla stumble there. 

Outlook: Close to 70% of workers in Sweden are union members and 90% of them are covered by a collective bargaining agreement. For Swedish unions, this is a campaign to defend a model of organized labor that is “essential to the country’s economic success and stability,” according to The New York Times. And for Tesla, it is a test of how far its union-avoidance strategy can go. HR Policy Global is planning to provide an issue briefing in the near future.