Tesla (NASDAQ:TSLA), late last week revealed a set of wage hikes for workers at its Gigaplant in the outskirts of Berlin.
The move follows a visit by the electric automaker’s CEO, Elon Musk, where management also announced the facility has been chosen to build the company’s next-generation model.
Tesla has faced pressure in Germany from the influential IG Metall union, which is striving to organize the plant and secure a union contract agreement with the company. Similarly, in Sweden, a smaller industrial union representing Tesla service workers has initiated a strike and is scheduled to engage in discussions with the company on Monday, pursuing a collective bargaining contract.
The announcements come as the United Auto Workers (UAW) interest turn to Tesla's U.S. business. The UAW recently won substantial improvements in their wage and benefits packages after striking against the Detroit Three automakers for nearly six weeks.
Following the UAW's recent victories, Toyota (NYSE:TM) announced a wage increase for most of its non-unionized U.S. auto-factory workers just last week.
However, Tesla said the increases are part of a routine review of wages at the factory. “Claims that there is a connection between Tesla’s salary adjustments and union activities are untrue,” Tesla said.
Tesla revealed that during a "team huddle" with Musk on Friday, executives had notified employees that the company would implement a 4% wage increase, effective from November, for the approximately 11,000 workers at the German plant. Additionally, Tesla plans to grant a 1,500 euro bonus (roughly $1,600 U.S.) in December as a measure to counteract inflation.
The announcement follows a similar inflation-adjustment bonus of the same magnitude granted last year, reaching the legal threshold in Germany for tax-free adjustments. Commencing in February, Tesla intends to augment annual wages by an extra €2,500 for production workers.
Tesla is the only major carmaker in Europe without union representation on the shop floor.
Shares of TSLA are up 1.60% in pre-market trading on Monday.