Market Expert Says Strike Against Tesla In Sweden May Have Dire Consequences: 'If The Unions Were To Allow Tesla To Get Away With This...'

Swedish labor market expert German Bender sees the ongoing protests against EV giant Tesla Inc TSLA in Sweden as integral to the market given its consequences.

What Happened: Though the ongoing conflict is small with less than 150 employees, it is against a huge employer with potentially high-impact consequence, Bender told The Guardian.

"I am not saying that if the unions lose, the next day the Swedish model ceases to exist; but it is important in principle, because if the unions were to allow Tesla to get away with this, other employers would start asking themselves, why do I have to sign a collective agreement?"

In late October, IF Metall, a workers’ union representing Tesla mechanics, initiated a strike against Tesla over collective bargaining agreements. 

In Sweden, approximately 90% of the workforce operates under collective agreements that govern various employment conditions, such as wages, employment types, occupational pensions, working hours, vacations, and notice periods.

These agreements allow for collaborative decision-making between employers and unions on labor market matters, including wages, as opposed to government dictation.

Since then, other unions have joined the movement in sympathy, with dockworkers, cleaning staff, electricians, and even postal workers all participating.

Why It Matters: Tesla contends that, despite the strike, over 90% of its employees continue to hold their positions, asserting that its terms are as good as or better than the union's demands. While Tesla doesn't manufacture in Sweden, its Model Y is among the best-selling cars in the country.

When the strike eventually threatened the delivery of new vehicles, CEO Elon Musk called it, "insane." Meanwhile, Tesla previously expressed no intent to enter into a collective agreement yet.

However, in late November, IF Metall union head Marie Nilsson told the Financial Times that the union has ample funds to sustain the strike for "a long, long time." 

“If Tesla demonstrates the feasibility of operating in Sweden without a collective agreement, it might tempt other companies to follow suit. We have a successful model in Sweden. We have tried to explain it. It’s very seldom this type of conflict arises,” Nilsson told FT.

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