The Tesla dispute: a new frontier?

In the face of a prolonged strike for union recognition, Tesla has turned posted workers into strike-breakers.

If ‘sustainability’ is becoming a buzzword across business and policy-making, it has predominantly environmental connotations. However important, this overlooks the critical social dimension.

Climate advocates argue that ‘the shift to electric cars offers an exciting—and potentially lucrative—chance to build an energy system that is smarter, as well as greener’. Electric vehicles may be part of the climate solution but to what extent are EV companies, such as Tesla, pro-social? And can they accept organisation by workers and unions?

The answers to these questions might be found in Sweden, where Tesla workers are engaged in what has become the country’s longest-running postwar strike against the company. Recently, the contours of the strike have changed, thanks to posted workers being used to circumvent the collective action.

Meteoric rise

Elon Musk, Tesla’s founder, sees it as a sustainable-energy as much as an EV company. Its sales have grown exponentially over the past half-decade, shocking many—not least detractors of EVs. Much media coverage has been bullish about Tesla’s meteoric rise, with many attributing it to a prophetic Musk.

In 2022, the company sold 232,066 vehicles in Europe, a 36.1 per cent increase on 2021. Scandinavia and the Netherlands have led the charge: In 2023, 20,400 cars were sold in Sweden, almost double the 2021 figure. Sales however remain relatively dependent on government incentives, which in Sweden include grants and tax subsidies.

Tesla is now the third-largest carmaker in Europe. To meet demand it opened a state-of-the-art ‘gigafactory’ outside Berlin, employing around 11,000 workers. Its battery-powered engine is however not all that differentiates Tesla from its combustion-engine competitors in Europe.

Tesla had almost 128,000 employees around the world in 2023. None of its workplaces is unionised and management has so far thwarted all attempts by Tesla workers, primarily in the United States, to secure a collective labour agreement (CLA).

In the world’s most neo-corporatist country, the Swedish metalworkers’ union, IF Metall, started work on organising Tesla workshops in 2019. The company flatly refused to sign a CLA covering its Swedish workers. After extended but fruitless negotiations, lasting five years, IF Metall members opted for the only weapon at their disposal, calling a strike.

Transnational dimension

The action began at the end of last October. Nine months on, what started as a local struggle has taken on a transnational dimension—some have framed the strike as epoch-defining, with implications beyond Sweden. While at one level a strike about workers’ involvement in the setting of wages and conditions, at another it has been about the social contract on which the Nordic employment model hangs.

Postal workers, painters, electricians and dock workers have all launched secondary action against Tesla. The transport workers announced a blockade against loading and unloading Teslas in Malmö, Södertälje, Gothenburg and Trelleborg. In May, Sweden’s largest union, Unionen, said it had stopped all Tesla-related work at Dekra Industrial AB, which conducts equipment inspections.

Before long, other Nordic unions were showing solidarity too. The Danish union 3F Transport prevented dock workers from unloading Tesla cars bound for Sweden via the Øresund bridge. The Finnish AKT and Norwegian Fellesforbundet announced they would block shipments in the absence of an agreement.

Fellesforbundet launched an organising campaign in Norway, where Tesla sales are even higher, but its workers are similarly without a CLA. According to a Fellesforbundet official, the Tesla dispute is a struggle for the principle of the Nordic model. To this end, the union has launched a campaign raising public awareness of the company’s anti-union stance.

Posted workers

Since February, using European Union rules on posted workers, Tesla has brought in workers from Belgium, Denmark, Finland, France, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal and Switzerland. This is not only a new low for Sweden but also the EU.

Posted work is prevalent in construction—not without controversy. Sweden was at the centre of the Laval case, which ended up before the Court of Justice of the EU. The ruling weakened unions, with the late Brian Bercusson noting that ‘nineteenth-century doctrinal ghosts of the dominance of market freedoms, long since revised … have returned to haunt [the] EU’.

The 1938 Saltsjöbaden agreement is the cornerstone of Swedish employment relations. The ‘spirit of Saltsjöbaden’ considerably reduced the frequency of strikes and lockouts, having been preceded by regular resort to strike-breaking tactics by employers. These are Bercusson’s ‘ghosts’ and Tesla has summoned them anew.

Musk is a modern-day Henry Ford, who equally opposed unions ‘interfering’ with his automobile vision. Ford was however eventually ‘convinced’ that Ford workers should be allowed to unionise. Musk remains ideologically opposed to unions, commenting for instance that his workers would lose share options if they unionised.

Yet, following the strike in Sweden, 16 Nordic institutional investors—their combined assets over $1 trillion—wrote to Tesla headquarters inviting the company to work with Swedish unions. The Danish pension fund, PensionDanmark, even sold its Tesla shares. At last month’s annual meeting of Tesla shareholders, a proposal regarding freedom of association and collective bargaining was nevertheless voted down.

Tesla remains adamant in its mission to stay ‘union-free’, however oddly this sits with its ‘save the planet’ stance. The latter is in any event in tatters given Musk’s endorsement this month of the US presidential re-election campaign by the climate-change denier Donald Trump.

Strike-breakers

Posted workers in the past have been (ab)used to undermine national labour movements’ capacities to counter ‘social dumping’. Now they are being used as strike-breakers contravening the fundamental right to collective bargaining and collective action.

The European Commission has acknowledged that sectoral collective bargaining by strong, representative trade unions is the most effective way to lift and enforce pay levels. Tesla could have joined the Swedish Confederation of Transport Enterprises and signed up to the sectoral collective agreement, but it decided against this. A bespoke CLA could have been signed with IF Metall but Tesla preferred to stick to its ideological guns. These snubs by Tesla—while profiting from public incentives offered to citizens to buy Evs—stand the idea of a ‘just transition’ on its head and left IF Metall with little choice but to call a strike, widely supported beyond Sweden’s borders.  

There is an onus on the commission and its re-elected president, Ursula von der Leyen, to ensure posted workers are not used to break strikes. Otherwise, capital becomes the only real bearer of rights under EU law. The new commission should instruct the European Labour Authority to investigate. And ‘green’ investment should be withheld from those companies unwilling to engage with independent collective representatives of workers and to sign agreements.