Sweden could be a new nightmare for Elon Musk

For several weeks now, Sweden has become the battleground for the largest labor action Tesla, the electric car company founded by entrepreneur Elon Musk in 2003, has ever faced. What began as a strike by a group of 130 mechanics affiliated with the national union IF Metall, responsible for inspecting Tesla’s cars, has now evolved into a multi-sector protest aiming to secure a collective agreement defining wages, working hours, and benefits for those employed by the company.

The fact is that for the first time, Elon Musk is facing the strong workers’ protections that characterize almost all of Europe, and he doesn’t like it.

Swedish Tesla’s had enough

The strike, which commenced on October 27, targeted Tesla’s reluctance to sign a collective contract outlining the terms and conditions of employment. Initially led by mechanics, the protest has garnered support from various worker categories in a show of solidarity. Port workers have refused to unload Tesla’s goods at Swedish ports for days, cleaning staff have announced their refusal to clean Tesla’s showrooms and workshops, and electricians have pledged not to repair the company’s charging stations. Since November 20, postal workers have joined the movement, ceasing deliveries of letters, spare parts, and pallets to all Tesla addresses in Sweden.

Sweden, being Tesla’s fifth-largest market in Europe, holds significant economic importance for the company. While Tesla doesn’t have manufacturing plants in Sweden, its electric vehicles undergo inspection in numerous local workshops. Unlike some countries, Sweden lacks national laws dictating working hours or minimum wages. Instead, these details are traditionally outlined in sector-specific collective agreements, which nearly all companies in the country adhere to. IF Metall, the metalworkers’ union, has been attempting to convince Tesla to sign such an agreement for five years, but negotiations have reached an impasse, prompting the strike at the end of October.

eCar Expo 2023

Mikael Petersson, the union negotiator for electricians who joined the protest on November 17, emphasized the importance of collective agreements in the Swedish labor market. He stated, “Collective agreements form the backbone of the Swedish labor market model. Fighting for the application of the Swedish model becomes even more crucial when it involves a company as large as Tesla.Gabriella Lavecchia, president of the postal workers’ union, accused Tesla of seeking competitive advantages by offering workers lower wages and inferior conditions compared to those guaranteed by a collective agreement.

This clash marks the most significant labor dispute involving Swedish unions and an international company since 1995 when the U.S. toy company Toys R Us refused to negotiate a collective agreement (it seems Americans never learn). After a three-month strike, starting with retail employees and extending to other unions, the company eventually capitulated.

Tesla’s current standoff with Swedish workers echoes past accusations against the company concerning workers’ rights. In 2018, Tesla faced allegations of launching a massive defamation and intimidation campaign against a former employee who reported excessive pollution. Another ex-employee, Carlos Ramirez, sued the company in 2018 for not addressing injuries sustained by workers in its facilities and failing to report them to authorities, claiming he was fired as retaliation for raising concerns. Tesla has also faced multiple allegations of spying on employees and fostering an unhealthy work culture.

From Sweden to Norway (and the rest of Europe?)

As the strike in Sweden continues, Elon Musk has expressed his discontent, labeling the wave of strikes affecting his automotive company in Sweden as “insane.” The strike, led by the If Metall union boasting over 300,000 members in the Swedish industry, shows no signs of resolution as it enters its fifth week. The dispute has expanded beyond Tesla’s facilities, encompassing various sectors due to Sweden’s labor laws allowing workers from different industries to join colleagues in protest during strikes. Port workers, waste collectors, electricians, and postal workers are now also part of the widespread protest.

Negotiations with the unions have reached a deadlock, and the prospects of reaching a swift resolution seem dim. Instead, there is a growing likelihood that the protest may spill over beyond Sweden, with the Norwegian union Fellesforbundet reportedly prepared to initiate a strike in Norway. The situation continues to evolve, and the outcome remains uncertain as both Tesla and the unions stand firm in their positions, turning the spotlight on the broader issue of fair labor practices in the globalized world of industry.

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