Tesla Not Immune To Union Strikes After All As Labor Group In Europe Takes Action

Tesla Inc TSLA finds itself at the center of a labor dispute in Sweden.

What Happened: IF Metall, a Swedish workers' union representing Tesla mechanics, is in a standoff with the Austin, Texas-based car manufacturer. Tesla reportedly decided not to sign a collective agreement — a foundational aspect of the Swedish labor market.

According to Teslarati, Tesla and IF Metall had a meeting on Tuesday, Oct. 24, facilitated by mediators from the Mediation Institution.
Despite the mediation, Tesla stood by its decision. This prompted IF Metall to consider taking industrial action and, as a result, the union decided not to extend its notice to appeal to additional Tesla workers in Sweden.

"The main reason for IF Metall to take industrial action at Tesla is to ensure that our members have decent and safe working conditions. Over a long period of time, we have attempted to discuss with Tesla the signing of a collective agreement, yet without success. Now we see no solution other than to take industrial action," IF Metall said in a public statement.

Collective agreements in Sweden encompass a range of employment conditions including wages, form of employment, occupational pension, working hours, vacations, and notice periods.

More than 120 Tesla mechanics working at seven workshops across Sweden went on strike.

IF Metall emphasized that the dispute is primarily about member's wages, pensions, and insurances.

"This conflict is about our members’ wages, pensions, and insurances. And in the end, it is about the playing rules on the Swedish labor market,” IF Metall's Contract Secretary Veli-Pekka Säikkälä said.

Why It Matters: Tesla, in the U.S., is typically perceived as immune to union labor disputes. That's because electric vehicle (EV) battery and production plants in the U.S. are mostly non-union.

To grow, the United Auto Workers (UAW) will have to expand to EV plants.

Currently, major American automakers like Ford Motor Co F, General Motors GM and Stellantis STLA are grappling with similar issues.

The UAW in the U.S. is still on strike.

Notably, Ford recently announced that it has reached a tentative agreement with the UAW, which is currently under review by the union. The situation in Sweden serves as another reminder that labor relations remain a significant challenge for Tesla and other automakers, both domestically and internationally.

Photo courtesy of Tesla