How did the Tesla strike gain steam?
The strike by mechanics affiliated with the Swedish metalworkers’ union, IF Metall, has since gained momentum. Sympathetic workers from various sectors are withholding their services to put pressure on Tesla. Among those taking action are members of the country’s transport union, who have stopped collecting waste from Tesla service centers. Employees from Hydro Extrusions, a Tesla component supplier, are refusing to manufacture parts for the electric cars. Painting, cleaning, and electrical servicing of Tesla vehicles and facilities have also been halted by different unions.
Even postal workers have joined the protest. They have ceased delivering license plates for new Tesla vehicles, prompting Tesla to take legal action against the Swedish Transport Agency and the delivery company, PostNord. As the strike continues, the courts are still deliberating on the matter.
The strike has not been confined to Sweden alone. Dockworkers in Denmark are refusing to unload Tesla vehicles arriving at ports, while unions in Finland and Norway have issued warnings that they will join the strike if the dispute remains unresolved.
Beyond the striking workers, Tesla is facing pressure from institutional investors. Sixteen prominent investors, including KLP and PensionDanmark, have written to the company’s board chair, expressing concern over the labor dispute. This pressure has resulted in the divestment of some Tesla stocks by organizations like Denmark’s teachers’ pension fund, Paedagoernes Pension.
Why are unions so strong in Scandinavia?
In Scandinavia, unions play a significant role in collective bargaining agreements. Sweden, in particular, boasts a high unionization rate, with nine out of ten workers covered under such agreements. The negotiation process between unions and employers is largely independent, without significant state involvement. This system contributes to fewer strikes compared to countries with more state intervention, such as France and Germany.
The IF Metall union highlights how collective agreements allow for fair competition and prevent employers from imposing unfavorable conditions on their employees. The success of this model is exemplified by the Toys R Us toy chain, which started operations in Sweden with a nonunion workforce in 1995.
Elon Musk has been vocal about his opposition to unions, expressing his disagreement with the idea in various instances. He has accused unions of spreading negativity within companies and denying that Tesla operates with a wealth hierarchy due to its stock options program. Musk has clashed with the United Auto Workers in the United States and has fiercely fought against union challenges to Tesla’s practices.
What could happen next?
The labor unrest in Scandinavia has caught the attention of labor organizers in Germany, where Tesla’s first European gigafactory was established in 2022. The plant, located near Berlin, employs approximately 11,000 people. While German workers and unions are prohibited from participating in sympathy strikes, the situation may encourage Tesla production line workers to seek local union representation. The Germany’s IG Metall union has raised concerns about occupational safety at the plant following reports of accidents and health issues, resulting in high sick rates among Tesla employees.
As the strike in Sweden continues and potential actions loom in Germany, the labor dispute poses challenges for Tesla, both in terms of managing ongoing strikes and addressing growing concerns from labor unions regarding worker rights and conditions.