Nordic activists take on Elon Musk in 2023. What will happen now?

(CNN) — What started nine weeks ago with a group of Swedish mechanics demanding Tesla accept collective bargaining has turned into a broader battle over the way the Nordic region works and lives.

The stakes are also high for the automaker and its CEO, the world’s richest man, Elon Musk.

Bowing to union pressure in Sweden could embolden Tesla workers in Germany – home to the company’s only European factory – who similarly want a collective agreement on wages and other employment conditions. It could also boost unionization efforts by Tesla’s US workers.

For unions in the Nordic countries – a region that includes Sweden, Norway, Denmark, Finland and Iceland – the conflict with Tesla and Musk, a staunch critic of unions, is existential.

Jesper Petersson told CNN, “If a large international company is allowed to dominate the Swedish labor market and does not sign a collective agreement, what does this tell us about what other companies will do in the future? ) will you accept the model? Spokesman for IF Metal, which represents Tesla mechanics.

For more than a century, Nordic unions have helped determine the terms of employment of their members by negotiating with employers and signing collective agreements.

According to the latest data from the Paris-based Organization for Economic Co-operation and Development (OECD), an average of 83% of all workers in the five countries are covered by this type of negotiation.

Governments in the Nordic countries prefer collective bargaining rather than legislating a minimum wage, which exists in most other European countries.

But a Tesla subsidiary in Sweden refused to sign a collective agreement with IF Metall. In response, some of the 120 mechanics employed by Tesla in the country to maintain its cars went on strike in late October and did not return to work. The union would not say how many mechanics are still on strike.

The role of collective agreements in the Swedish labor market is “fundamental and profound”, according to Mikael Hansson, an associate professor specializing in labor law at the country’s Uppsala University.

Hence a wave of “solidarity strikes”. Swedish dockworkers have stopped deliveries of Tesla cars at the country’s ports, electricians have refused to service charging stations, and postal workers have even stopped delivering license plates. Musk responded, “This is madness.”

In early December, unions representing port workers in Denmark, Norway and Finland announced plans to halt all exports of Tesla cars to Sweden from their ports.

Peterson told the union that IF Metal is paying striking mechanics up to 130% of their normal wages, which also includes contributions to their pension and vacation funds.

“We’re willing to keep going as long as it takes.”

Investors support workers

Swedish workers have fought this battle before and won. Toys R Us tried to oppose collective bargaining when it came to the country in 1995, but relented after three months of union action, which included a solidarity strike.

This time, Nordic investors have also joined the fight. A group of 16 institutional investors, including pension funds and asset managers, urged Tesla to respect the sector’s collective bargaining tradition and the company’s attitude toward unions in a letter sent earlier this month and seen by CNN. Expressed “deep concern”.

The letter’s co-signers, the Danish Pension Fund Denmark, went one step further. Earlier this month it announced it had sold its $70 million stake in the automaker, citing Tesla’s “very adamant refusal” to violate its collective bargaining agreements.

Laura Carlsson, a law professor at Stockholm University, cannot remember another case of divestment aimed at protecting the Nordic region’s labor traditions. And he believes Tesla is unlikely to succeed in attempting to bypass them.

“Collective agreements are the basis of labor law in Sweden,” he told CNN.

Hanson of Uppsala University agrees.

He said, “I have a hard time seeing the unions losing. They’ve invested too much. They really can’t lose this fight.”

Tesla told CNN in a statement that its employees are “rewarded with fair terms and conditions of work.” “This is why Tesla, like many other companies, has decided not to sign a collective bargaining agreement,” he said, declining to answer specific questions.

Is Germany the next stop?

The stakes are relatively low for Tesla in Sweden.

According to Matthias Schmidt, an independent automotive market analyst, the country represented just over 6% of Tesla sales in Europe in the first 10 months of the year.

The biggest risk to the company’s results lies in the south, in Germany, which accounted for about 20% of its European sales during the same period, according to Schmidt data, and where the automaker has a factory. Capable of producing 375,000 cars. year to customers across the continent.

Schmidt said German law makes it difficult for workers to strike in solidarity with those elsewhere, but solidarity actions in the Nordic countries “could act as a catalyst” for German Tesla workers to join local unions. .

For more than a year, workers at the Berlin plant have complained about tough work schedules, understaffing and strict production targets, according to Markus Sievers, a spokesman for IG Metall, Germany’s largest union.

Sievers did not say how many of the plant’s 11,000 workers had joined his union, but he said the union was rapidly adding members and “several” had joined this year.

“We’re not at the point right now where we can organize a strike,” he told CNN. “We are still gathering strength (in numbers).”

A demand on the lips of some members of IG Metal? A collective agreement as per the union.

“German unions are waiting for Tesla to bow out,” says Hansson of Uppsala University. “And then they will have a compelling argument: If an exception can be made in Sweden, an exception (can be made) in Germany.”

road ahead

For Tesla and Musk, negotiating with unions would mean looking bad.

The world’s largest electric carmaker has thwarted several attempts to unionize its workforce in the United States. The country’s National Labor Relations Board has accused Tesla of interrogating, disciplining and discriminating against the workers involved.

Musk himself has made no secret of his disdain for unions. The federal agency ordered him to delete a 2018 tweet in which he suggested Tesla employees would lose their stock options if they unionized.

More recently, he told The New York Times, “I don’t agree with the idea of ​​unions,” adding that he believes they “inherently try to create negativity in a company.”

But protections for organized labor in the United States are much weaker than in Europe.

Stockholm University’s Carlsson said a realistic alternative to signing a collective agreement in Sweden would be for Tesla to hire a contractor who would sign the agreement. This will help Musk to maintain distance from the union.

Amazon did something similar when it entered the Swedish market in 2020, hiring a German-Swiss logistics company, which had already signed a collective agreement with the Swedish Transport Workers Union, to operate its warehouse in the country. Had done.

For now, Tesla has strengthened itself. Earlier this month it posted an ad for a position in the Nordic countries’ legal and government affairs department, specifically for someone “with a proven track record in initiating regulatory change” in the region.

According to the announcement posted on LinkedIn, the successful candidate will help ensure that the Nordic countries’ “political, regulatory and financial frameworks” “support Tesla’s mission.”

For Carlsson, the new situation reflects ignorance of the Swedish context.

“It shows a complete lack of understanding of what the (collective bargaining) system is and how fundamental it is, not only in Swedish society, but in the legal system,” he said.