Social Europe

  • EU Forward Project
  • YouTube
  • Podcast
  • Books
  • Newsletter
  • Membership

US electric-car maker faces Swedish union shock

German Bender 31st October 2023

Tesla faces its first ever strike after refusing to negotiate with the Swedish trade union IF Metall.

A strike has erupted at Tesla, the notoriously anti-union car manufacturer. Perhaps not surprisingly, the strike is in Sweden, one of the most unionised countries. According to the confederation IndustriALL, it is the first formal labour industrial action against Tesla anywhere in the world.

The strike was initiated by the trade union IF Metall. For five years Tesla’s Swedish subsidiary, TM Sweden, had refused to negotiate a collective agreement for its employees in repair shops across the country. The first strike notice was limited to union members among Tesla’s own employees, about 120 mechanics and service technicians (there are no Tesla factories in Sweden).

But, after a meeting between TM Sweden and IF Metall, summoned by the National Mediation Office last Tuesday, the company’s representatives withdrew from further negotiations, citing corporate policy not to sign collective agreements in any country. In response, IF Metall immediately expanded its strike notice to all repair shops servicing Tesla vehicles in Sweden—not only Tesla’s own.

An additional 470 workers at 16 work sites will be affected in this next phase of the strike, starting on Friday. No union members in the targeted shops will be allowed to do any work on Tesla vehicles—including servicing, repairs or preparing new cars for shipping to the thousands of customers waiting for their brand-new Teslas (Sweden’s top-selling car).

More could be in store for Elon Musk’s company, unless it heeds union demands. When employers refuse to engage in collective bargaining, Swedish unions can resort to strikes and other forms of industrial action. Options include bans on new hires or overtime work and even solidarity strikes by other unions.

Labour-market model

A precedent hinting at what Tesla could be up against stems from 1995, when Toys’R’Us entered the Swedish market and initially refused to sign a collective agreement with the retail union, Handelsanställdas Förbund. The company eventually conceded after three months of strife, including solidarity strikes when other unions blocked all deliveries, refuse collection, postal services, bank payments and other vital parts of the firm’s operations. The action was even supported by unions in many other countries, which encouraged their members to boycott Toys’R’Us products.

Although the IF Metall strike as yet concerns relatively few workers, it is of prime importance for Swedish unions, which see it as necessary to safeguard the country’s recognised labour-market model. One of its institutional pillars is agreements, usually at the sectoral level, which cover 90 per cent of all employees.

Cutting labour costs by refusing to negotiate collective agreements is generally considered unfair competition in Sweden, by unions and employers alike. Unions also see it as a potential downward pressure on wages and working conditions in other companies, in the long run undermining the model itself.

In the Swedish model not only workers are organised—employers are also organised in employer associations, bound by those collective agreements. This means that Tesla could simply offer its employees the sectoral collective agreement by joining the Swedish Confederation of Transport Enterprises. The employer confederation has indeed informed Tesla of this option but to no avail. In other words, the pressure on Tesla to adapt to the Swedish model does not only come from unions but from the employer side as well.

Another reason why the conflict is of such significance for the unions is that Tesla is emblematic of the rapidly growing electric-vehicle market. Securing collective agreements for jobs created in the industrial transition is one of the most reliable ways to make sure that green jobs will also be good jobs—a vital union concern.

Symbolic significance

But the conflict has symbolic significance for Tesla, too. The material cost to the company of a Swedish union contract would of course be negligible: it would only affect one or two in a thousand of its 120,000 employees worldwide. But Musk might see the symbolic price as much higher: a concession in Sweden could bolster union demands in countries where a larger portion of Tesla’s employees work.

In fact, Swedish unions are not the only ones applying pressure to the company. Earlier this month, Bloomberg cited the newly elected president of the powerful German industrial union, IG Metall, who directed a sharp comment at Tesla. ‘You need to be careful. The rules of the game are different here,’ Christiane Benner said, referring to the company’s attempts to obstruct union organising at one of its factories near Berlin, employing a tenth of its global workforce.

Meanwhile, in the United States, the rolling United Auto Workers strikes since mid-September at the ‘Big Three’ Detroit vehicle manufacturers—General Motors, Ford and Stellantis—have affected over 40,000 workers and racked up costs beyond $9.3 billion, according to Forbes. While Tesla is not unionised and thus is not a target, its leadership is likely monitoring developments closely. Some stock analysts and other car makers say that Tesla stands to benefit from the conflict, as they foresee higher labour costs for the Big Three.

Tesla already controls approximately 60 per cent of the market for electric vehicles and, according to CNN, the Big Three pay their workers 20 to 30 per cent more than Tesla’s $55 hourly wage including benefits. If the UAW manages however to negotiate an attractive union contract for its members—Ford and Stellantis have tentatively agreed deals involving wage increases of 25 per cent, which yesterday it was reported General Motors was echoing—it could boost union interest among Tesla workers as well.

And clearly there is interest. Several UAW attempts to organise Tesla workers have however failed, partly due to the company’s unlawful practices to curb unionisation efforts.

Political considerations

Aside from the economic dimensions, there are political considerations too. It is not unlikely that politicians will start to realise that union contracts are crucial to fighting inequality and ensuring decent jobs in the rapidly growing electric-vehicle industry. The US president, Joe Biden, even joined a UAW picket line in late September.

Seen against the backdrop of union surges in key Tesla markets and in the context of efforts to promote a just transition, the seemingly small Swedish strike takes on greater import. While its outcome is highly uncertain, what is clear is that the union-busting methods Tesla has employed in the US will not be tolerated in Sweden.

IF Metall would not have taken the risk to challenge Tesla unless it was highly motivated and had carefully considered its options. Atle Høie, general secretary of IndustriALL, which represents 50 million workers in 140 countries, put it this way: ‘Elon Musk’s business model is to avoid respecting human rights. Now he is taken on by one of our strongest unions. We must defeat the Tesla business model, and Sweden is the best place to start.’

German Bender
German Bender

German Bender is chief analyst at the Swedish think-tank Arena. A PhD candidate at Stockholm School of Economics, he was a visiting research fellow at Harvard Law School in 2023.

Harvard University Press Advertisement

Social Europe Ad - Promoting European social policies

We need your help.

Support Social Europe for less than €5 per month and help keep our content freely accessible to everyone. Your support empowers independent publishing and drives the conversations that matter. Thank you very much!

Social Europe Membership

Click here to become a member

Most Recent Articles

u4219834664e04a 8a1e 4ee0 a6f9 bbc30a79d0b1 2 Closing the Chasm: Central and Eastern Europe’s Continued Minimum Wage ClimbCarlos Vacas-Soriano and Christine Aumayr-Pintar
u421983467f bb39 37d5862ca0d5 0 Ending Britain’s “Brief Encounter” with BrexitStefan Stern
u421983485 2 The Future of American Soft PowerJoseph S. Nye
u4219834676d582029 038f 486a 8c2b fe32db91c9b0 2 Trump Can’t Kill the Boom: Why the US Economy Will Roar Despite HimNouriel Roubini
u42198346fb0de2b847 0 How the Billionaire Boom Is Fueling Inequality—and Threatening DemocracyFernanda Balata and Sebastian Mang

Most Popular Articles

startupsgovernment e1744799195663 Governments Are Not StartupsMariana Mazzucato
u421986cbef 2549 4e0c b6c4 b5bb01362b52 0 American SuicideJoschka Fischer
u42198346769d6584 1580 41fe 8c7d 3b9398aa5ec5 1 Why Trump Keeps Winning: The Truth No One AdmitsBo Rothstein
u421983467 a350a084 b098 4970 9834 739dc11b73a5 1 America Is About to Become the Next BrexitJ Bradford DeLong
u4219834676ba1b3a2 b4e1 4c79 960b 6770c60533fa 1 The End of the ‘West’ and Europe’s FutureGuillaume Duval
u421983462e c2ec 4dd2 90a4 b9cfb6856465 1 The Transatlantic Alliance Is Dying—What Comes Next for Europe?Frank Hoffer
u421983467 2a24 4c75 9482 03c99ea44770 3 Trump’s Trade War Tears North America Apart – Could Canada and Mexico Turn to Europe?Malcolm Fairbrother
u4219834676e2a479 85e9 435a bf3f 59c90bfe6225 3 Why Good Business Leaders Tune Out the Trump Noise and Stay FocusedStefan Stern
u42198346 4ba7 b898 27a9d72779f7 1 Confronting the Pandemic’s Toxic Political LegacyJan-Werner Müller
u4219834676574c9 df78 4d38 939b 929d7aea0c20 2 The End of Progess? The Dire Consequences of Trump’s ReturnJoseph Stiglitz

Hans Böckler Stiftung Advertisement

WSI Report

WSI Minimum Wage Report 2025

The trend towards significant nominal minimum wage increases is continuing this year. In view of falling inflation rates, this translates into a sizeable increase in purchasing power for minimum wage earners in most European countries. The background to this is the implementation of the European Minimum Wage Directive, which has led to a reorientation of minimum wage policy in many countries and is thus boosting the dynamics of minimum wages. Most EU countries are now following the reference values for adequate minimum wages enshrined in the directive, which are 60% of the median wage or 50 % of the average wage. However, for Germany, a structural increase is still necessary to make progress towards an adequate minimum wage.

DOWNLOAD HERE

KU Leuven advertisement

The Politics of Unpaid Work

This new book published by Oxford University Press presents the findings of the multiannual ERC research project “Researching Precariousness Across the Paid/Unpaid Work Continuum”,
led by Valeria Pulignano (KU Leuven), which are very important for the prospects of a more equal Europe.

Unpaid labour is no longer limited to the home or volunteer work. It infiltrates paid jobs, eroding rights and deepening inequality. From freelancers’ extra hours to care workers’ unpaid duties, it sustains precarity and fuels inequity. This book exposes the hidden forces behind unpaid labour and calls for systemic change to confront this pressing issue.

DOWNLOAD HERE FOR FREE

ETUI advertisement

HESA Magazine Cover

What kind of impact is artificial intelligence (AI) having, or likely to have, on the way we work and the conditions we work under? Discover the latest issue of HesaMag, the ETUI’s health and safety magazine, which considers this question from many angles.

DOWNLOAD HERE

Eurofound advertisement

Ageing workforce
How are minimum wage levels changing in Europe?

In a new Eurofound Talks podcast episode, host Mary McCaughey speaks with Eurofound expert Carlos Vacas Soriano about recent changes to minimum wages in Europe and their implications.

Listeners can delve into the intricacies of Europe's minimum wage dynamics and the driving factors behind these shifts. The conversation also highlights the broader effects of minimum wage changes on income inequality and gender equality.

Listen to the episode for free. Also make sure to subscribe to Eurofound Talks so you don’t miss an episode!

LISTEN NOW

Foundation for European Progressive Studies Advertisement

Spring Issues

The Spring issue of The Progressive Post is out!


Since President Trump’s inauguration, the US – hitherto the cornerstone of Western security – is destabilising the world order it helped to build. The US security umbrella is apparently closing on Europe, Ukraine finds itself less and less protected, and the traditional defender of free trade is now shutting the door to foreign goods, sending stock markets on a rollercoaster. How will the European Union respond to this dramatic landscape change? .


Among this issue’s highlights, we discuss European defence strategies, assess how the US president's recent announcements will impact international trade and explore the risks  and opportunities that algorithms pose for workers.


READ THE MAGAZINE

Social Europe

Our Mission

Team

Article Submission

Advertisements

Membership

Social Europe Archives

Themes Archive

Politics Archive

Economy Archive

Society Archive

Ecology Archive

Miscellaneous

RSS Feed

Legal Disclosure

Privacy Policy

Copyright

Social Europe ISSN 2628-7641