Nordic Workers Rise Against Elon Musk in 2023: A Sneak Peek into the Future
The fight for workers' rights in the Nordic region gains momentum as Swedish mechanics demand collective bargaining with Tesla, sparking investor support and potentially spreading to Germany The road ahead is filled with possibilities and challenges
Nine weeks ago, mechanics in Sweden demanded that Tesla agree to collective bargaining. This has now escalated into a larger battle for the Nordic regions' way of work and life. The stakes are also high for the carmaker and its CEO, Elon Musk, who is the world's richest man.
Giving in to the demands of the union in Sweden may empower Tesla (TSLA) workers in Germany, where the company's only European factory is located, who also seek a collective agreement on wages and employment terms. It may also fuel efforts to unionize Teslas US workforce.
For labor unions in the Nordic region, including Sweden, Norway, Denmark, Finland, and Iceland, the clash with Tesla and Musk, who openly criticizes unions, is a matter of survival.
"If a large international company is permitted to assert itself in the Swedish labor market and refuse to sign a collective agreement, then what's to prevent other companies from adopting this same model in the future?" Jesper Petersson, a spokesperson for IF Metall, which represents the Tesla mechanics, told CNN.
Emma Hansson, chairman of IF Metall Stockholms län stands in front of Tesla's Service Center in Segeltorp, south of Stockholm in October, 2023.
Jessica Gow/TT News Agency/AFP/Getty Images/File
The conflict between Tesla and Swedish workers could escalate into a regional dispute, putting at risk the long-standing negotiation process between Nordic labor unions and employers for fair employment terms.
The most recent data from the Paris-based Organisation for Economic Co-operation and Development (OECD) shows that, on average, 83% of workers in the five countries are covered by collective bargaining negotiations.
In the Nordics, governments favor collective bargaining over implementing a minimum wage through legislation, a practice that is common in most other European nations.
But a Tesla subsidiary in Sweden has refused to sign a collective agreement with IF Metall. This resulted in some of the 120 mechanics hired by Tesla to service its cars in the country going on strike in late October and they have not returned to work. The union has chosen not to disclose how many mechanics are still on strike.
Mikael Hansson, an associate professor specializing in labor law at Uppsala University in Sweden, described the role of collective agreements in the country's labor market as "fundamental and profound."
As a result, a wave of "sympathy strikes" has ensued. Dockworkers in Sweden have halted deliveries of Tesla cars at the nation's ports, electricians have declined to service charging stations, and postal workers have even ceased delivery of license plates. Musk's response to the latter development was, "This is insane."
An IF Metall banner saying "We demand a collective agreement!" displayed outside a Tesla service center in Segeltorp, Sweden, on December 5.
Erik Flyg/Bloomberg/Getty Images
In early December, dockworker unions in Denmark, Norway, and Finland revealed their intentions to prevent any Tesla car exports to Sweden from their ports. The striking mechanics, supported by IF Metall, are receiving up to 130% of their regular wages, which includes contributions to their pension and vacation funds, according to Petersson from the union.
"We are prepared to go on (for) as long as it takes."
Investors back the workers
Swedish workers have previously fought and emerged victorious in this battle. When Toys R Us initially resisted collective bargaining upon its arrival in the country in 1995, it eventually gave in after three months of industrial action, including sympathy strikes. This time, Nordic investors have also joined the dispute. A collection of 16 institutional investors, such as pension funds and asset managers, implored Tesla in a letter sent earlier this month, which has been viewed by CNN, to honor the region's history of collective bargaining and expressed "deep concern" about the company's stance on unions.
PensionDanmark, a Danish fund that co-signed the letter, has demonstrated its opposition by taking action. Earlier this month, the fund announced the sale of its $70 million stake in the carmaker, citing Tesla's strong denial of collective agreements. Laura Carlson, a law professor at Stockholm University, cannot remember another instance of a divestment aimed at upholding the labor traditions of the Nordic regions. Additionally, she believes that Tesla is unlikely to succeed in its attempt to bypass these traditions.
"Collective agreements are the foundation of labor law in Sweden," she told CNN.
Hansson at Uppsala University agrees.
"I find it hard to see the trade unions suffer a loss. They have put in too much effort. It's crucial that they don't lose this fight," he expressed.
According to a statement from Tesla to CNN, the company's employees "are compensated with equitable terms and working conditions." "This is why Tesla, along with numerous other companies, has opted not to engage in a collective agreement," it said, refusing to address specific inquiries.
Next stop Germany?
The stakes are relatively low for Tesla in Sweden.
Germany represented nearly 20% of Tesla's sales in Europe during the first 10 months of the year, based on data from independent auto market analyst Matthias Schmidt. The country poses a larger risk to the company's profits, as it is home to the automaker's factory with a capacity to produce 375,000 cars annually for all of Europe.
German labor laws make it extremely difficult for workers to go on strike in support of others in other areas, but the sympathy action in the Nordic countries "could potentially motivate" Tesla's German workers to join local unions, according to Schmidt.
For over a year, employees at the Berlin plant have voiced concerns about demanding work hours, lack of staff, and stringent production goals, as explained by Markus Sievers, a representative for IG Metall, the largest labor union in Germany.
He refused to disclose the number of workers from the reported 11,000 plants who had joined his union. However, he mentioned that the union was rapidly gaining new members, with "a lot" signing up this year. "We're not ready to organize a strike just yet," he informed CNN. "We're still working on increasing our numbers."
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A demand on some of IG Metall members lips? A collective agreement, according to the union.
"The German trade unions are anticipating Tesla's concession," stated Hansson of Uppsala University. "And with that, they have a compelling point: If an exception can be made in Sweden, then it can also be made in Germany."
The road ahead
Tesla and Musk are unwilling to engage in negotiations with unions as it would damage their reputation.
The largest producer of electric vehicles has thwarted multiple attempts by its American employees to form unions. The National Labor Relations Board has accused Tesla of harassing, punishing, and showing bias against workers involved in unionization efforts.
Musk has been openly opposed to unions. The National Labor Relations Board instructed him to remove a tweet from 2018 suggesting that Tesla employees would lose stock options if they unionized. In a more recent interview with the New York Times, Musk stated, "I don't support the concept of unions" and expressed his belief that they tend to breed negativity within a company.
However, labor protections in the United States are significantly less robust compared to those in Europe. According to Carlson from Stockholm University, a practical option for Tesla in Sweden would be to hire a contractor who could then enter into a collective agreement, providing Musk with a way to maintain a distance from the union.
In 2020, Amazon (AMZN) made a move similar to this by partnering with a German-Swiss logistics firm that was already part of a collective agreement with the Swedish Transport Workers Union to run its warehouse in the country.
Emma Hansson, an IF Metall executive, stands on strike outside Tesla's service center in Stockholm, Sweden, on October 27.
Jessica Gow/TT News Agency/Reuters
At present, Tesla has firmly established its presence. In recent weeks, the company posted a job opening on LinkedIn for a position in Nordic legal and government affairs, seeking an individual with a demonstrated ability to influence regulatory changes in the region. The chosen candidate will play a key role in ensuring that the political, regulatory, and fiscal frameworks in the Nordics align with Tesla's mission.
Carlson believes that the new role demonstrates a lack of understanding of the Swedish context. She stated, "It shows a complete lack of understanding of what the system (of collective bargaining) is about, and how fundamental it is in Swedish society, not just in the legal system."
