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4th Mar 2024

Musk's Tesla problem in Sweden — how a strike snowballed

  • Tesla entered Sweden in 2013 — but still refuses to sign a collective agreement for its 120 employees across the country (Photo: Unsplash)
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Trade unions in Sweden generally avoid conflict and rarely go on strike, but electric-car giant Tesla's refusal to sign a collective agreement has unleashed them to mobilise against Elon Musk's company — disrupting operations across the country.

On 27 October, the IF Metall union representing over 300,000 workers in Sweden, including those working at Tesla's repair shops, saw no other option but to go on strike.

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  • 'Tesla's irrational dislike for unions does not make him [Elon Musk] exempt from the rules,' IndustriALL global union general secretary Atle Høie said (Photo: IF Metall)

Then, less than a month ago, it seemed like a small issue, involving just 120 mechanics and service technicians, but the action against Tesla has snowballed.

Today, the IF Metall union counts on the support of 10 other trade unions, who are showing solidarity for Tesla's employees, whom currently do not enjoy the same working conditions as their counterparts in the car industry.

Dockers, electricians, transport, cleaning, and postal workers are helping to widen the suffocating effect on Tesla by setting up a kind of solidary pickets. One that on Friday (17 November) will be even bigger.

More repair shops will join the action, and the Transport Workers' Union will extend its strike to all of Sweden's 50 or so ports, where the unloading of electric vehicles will be halted.

Talks with Tesla have frozen over the past two weeks, but IF Metall is convinced that the combined action is causing problems for Tesla and "will show effect", a union spokesperson told EUobserver on Thursday.

The Swedish union does not expect Tesla to exit the country as a result of these actions — which would be an "unwise" move given that Sweden is Tesla's fifth-biggest market in Europe, they said.

But after five years of negotiations, and more than two weeks of industrial action to get the automaker to sign an agreement, it seems a case of: 'Elon, Tesla has a serious problem in Sweden.'

The well-known anti-union attitude of Musk, CEO of Tesla and owner of Twitter/X, has led the Swedish industrial union to do something very rare in the Nordic country.

"Swedish labour unions almost never go on strike, but when they do, they have considerable power resources to pressure employers who refuse to sign collective agreements," German Bender, chief analyst at the think tank Arena Idé and visiting research fellow at Harvard Law School, told EUobserver.

Sweden is one of the most unionised countries in the EU, with 70 percent of employees belonging to a union.

Collective agreements are almost the norm, covering almost nine-out-of-ten employees, and are an important part of making the Swedish labour market work for both employers and employees.

All terms and conditions such as pay, working hours, insurance, pensions, etc. are set out in these agreements. Conversely, and largely for this reason, the Nordic country doesn't have a statutory minimum wage.

"The Swedish model where employers and unions engage in social dialogue has brought a stable labour market where everyone benefits," IndustriALL global union general secretary Atle Høie said.

"Tesla's irrational dislike for unions does not make him exempt from the rules," Høie added.

The company's reluctance to sign a collective agreement is seen by both unions and companies as a threat to the Swedish model of industrial relations.

The Swedish Transport Workers' Union has also called on Tesla to join and adopt the industry's collective agreement, but to no avail.

Tesla has no factories in Sweden, a country it entered in 2013, but its electric vehicles (EVs) are among the best-selling models in the Nordic country.

Tesla did not reply EUobserver for its request for comment, but the American carmaker told Sweden's TT News Agency that it is "unfortunate" that IF Metall called for industrial action.

"We already offer equivalent or better agreements than those covered by collective bargaining and find no reason to sign any other agreement," Tesla told them in an emailed statement.

The reality is that both sides have a lot to lose in this stalemate power game.

From Tesla's point of view, the cost of a collective agreement in the country would not make much difference. But it could set a precedent for its 120,000 employees worldwide.

"They may fear that a union contract in Sweden could boost morale for Tesla workers in larger markets, like the US or Germany where there have been numerous attempts to unionise Tesla factories, but so far no strikes," Bender said.

Indeed, the newly-elected president of Germany's most powerful trade union, IG Metall, has already warned Musk to be "careful" in his efforts to avoid unionisation of Tesla's factory near Berlin.

"The rules are different here [in the EU]," she told Bloomberg in an interview last month.

On the other hand, it threatens a long-standing system and the future of green jobs.

For Tesla's workers, not having a collective agreement means not having better wages and working conditions.

For other companies, not offering the same benefits and wages can lead to an uneven playing field in the market. This can put downward pressure on the offered working conditions.

And for the unions themselves, the move could jeopardise the future green jobs of a fast-growing electric vehicle market.

"When jobs in the fossil fuel industry are replaced by new jobs in the renewable energy industry, it is of strategic importance for trade unions that these green jobs are also good jobs," Bender said.

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