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Tesla strike in Sweden heats up as nation's largest union joins fray

Published 05/14/2024, 08:04 AM
Updated 05/14/2024, 09:02 AM
© Reuters. A Tesla sign is displayed over a Tesla showroom in Malmo, Sweden, December 14, 2023. REUTERS/ Tom Little/File Photo
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By Marie Mannes

STOCKHOLM (Reuters) - Sweden's biggest union on Tuesday threw its weight behind a six-month-old strike by mechanics at Tesla (NASDAQ:TSLA), escalating a conflict the notoriously union-shy company is facing with a Nordic labour force committed to collective bargaining.

The focus of the dispute - among Sweden's longest - is Tesla CEO Elon Musk's refusal to sign a collective bargaining agreement allowing the union to strike deals for the workforce as a whole. 

Last month, Musk said the labour storm had passed in the country where Tesla's Model Y is the top-selling car, but he was contradicted by a representative for metal workers' union IF Metall, who said its strike continued.

IF Metall confirmed to Reuters that about 44 of its members - roughly a third of the company's Swedish mechanics - have downed tools at Tesla, which does not produce vehicles in Sweden but services them locally. 

"The strike is ongoing and we have no signs of reaching an agreement in the near future," Marie Nilsson, head of IF Metall, said. "We have had a few sittings with the Swedish management during April, but... Tesla has shown little willingness in discussing an end to the conflict."

More than a dozen unions have launched action in support of IF Metall's strike, with Unionen the latest and biggest.

"It is fundamentally important to protect our collective agreement system," Martin Wastfeldt, head of negotiations at Unionen, a white-collar union with about 700,000 members, told Reuters.

Unionen began a blockade on Tuesday affecting all work for Tesla at DEKRA Industrial AB, which carries out legally mandated equipment inspections.

If Tesla seeks to circumvent the blockade by hiring other providers, Wastfeldt said Unionen was prepared to do more. 

This might involve Unionen members at the company that produces licence plates for Tesla in Sweden, or administrative, human resources and finance staff at Tesla itself.

"We have these measures in our arsenal to resolve labour market conflicts," Wastfeldt said.

Tesla did not immediately respond to a request for comment on the ongoing strike. It has previously said its Swedish employees have as good, or better, terms than those the union is demanding.

The fight is key for the company, whose tough stance globally on unions could be undermined if it buckles in Sweden, or if the strike spreads to bigger units in places like Germany where it is already tackling unrelated violent protests.

WAR CHEST 

While the numbers on strike in Sweden are small, the stakes are high. 

Allowing companies linked with the green and digital transition to operate in Sweden without collective agreements would undermine unions and threaten the Swedish model, forcing the state to take greater control.

"For IF Metall it is very important not to lose. They simply cannot do that," trade union expert Anders Kjellberg said.    

Sweden's unions have taken heart from past successes - Unionen signed up payment services group Klarna to a collective agreement last year - while war chests are ample, with more than 10 billion Swedish crowns ($921 million) in IF Metall's strike fund alone.

Yet there is little sign of the conflict ending any time soon.

Since December, Nordic dockworkers have blocked Tesla's car deliveries by ship to Sweden. But while union action has caused some disruption, there is little sign it is hitting Tesla's sales, with its Swedish new vehicle registrations broadly keeping pace with the market.

Since February, Tesla has brought in about 25 temporary staff from other European countries, some for multiple short-term stays. 

While it was unclear to what extent, if any, this was linked with the strike, it contrasted with the previous year, when no such workers were brought in, a review of labor registrations showed.

Tesla did not immediately respond to a request to clarify.  

While the conflict for now looks deadlocked, Kjellberg pointed to possible avenues for an eventual resolution. 

Amazon (NASDAQ:AMZN), for example, has a third-party company manage its Swedish warehouses signed up to collective agreements, allowing the U.S parent company to avoid doing so.

© Reuters. A Tesla sign is displayed over a Tesla showroom in Malmo, Sweden, December 14, 2023. REUTERS/ Tom Little/File Photo

"It could last for months or even years, because IF Metall can't give up," Kjellberg said. "But in time, it is possible both parties will want to find a solution."

($1 = 10.8617 Swedish crowns)

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