Tesla (TSLA.O) is encountering mounting challenges in Sweden as unions advocate for mechanics seeking a collective bargaining agreement with the American automaker. While Tesla lacks a manufacturing plant in Sweden, the approximately 130 mechanics associated with the Swedish union IF Metall initiated a strike on October 27, prompting solidarity from dockworkers and car dealerships that refused to handle Tesla products.
Suppliers join the fray
The pressure on Tesla intensifies as workers at one of its suppliers, Hydro Extrusions, are poised to go on strike next week. Around 50 unionised employees at Hydro Extrusions, a subsidiary of Norwegian aluminium and energy company Hydro (NHY.OL), will halt work on Tesla car products. The Vetlanda plant, responsible for crafting aluminium profiles from aluminium alloys, becomes the first Tesla supplier in Sweden to support the mechanics’ strike. Notably, the remaining operations at the plant will continue despite the strike.
Tesla’s response and labour union’s stand
In response to the escalating situation, Tesla informed IF Metall on November 6 that it was reluctant to sign a collective agreement. IF Metall spokesperson Jesper Pettersson stressed the union’s desire for Tesla Sweden to engage in a collective agreement, expressing the hope for a swift resolution to the conflict.
International pressure and wage disparities
As labour tensions rise, German unions have also exerted pressure on Tesla, urging the implementation of a comparable agreement for the 11,000 workers at its Gruenheide facility near Berlin. While Tesla recently increased wages by 4%, German union IG Metall contends that wages remain approximately 20% below the levels offered under collective agreements.
Outlook and Tesla’s silent stance
The brewing labour unrest in Sweden underscores the broader global challenge for Tesla as demands for collective agreements echo across its various locations. As workers seek fair representation and compensation, Tesla’s response to these demands remains a focal point. The situation also highlights the complexities surrounding international labour dynamics and the growing influence of unions in shaping the workplace conditions of major corporations.
In the absence of an immediate response from Tesla, the coming days will likely prove pivotal in determining the trajectory of negotiations and the resolution of the collective bargaining dispute in Sweden.