C.E.O. of Tesla, Chief Engineer of SpaceX and C.T.O. of X Elon Musk takes the stage during the New York Times annual DealBook summit on November 29, 2023 in New York City.
Michael M. Santiago | Getty Images
Though the dispute began with 130 mechanics at 10 Tesla repair workshops across a handful of Swedish cities, solidarity strikes have been launched by workers across multiple unions in Sweden and beyond.
Danish, Finnish and Norwegian unions across a range of sectors have in recent weeks announced their own measures to pressure Tesla into granting collective bargaining rights to its Swedish staff.
Several pensions funds have also dumped their holdings of Tesla stock over the company’s refusal to enter into agreements with labor unions.
According to a job posting on Tesla’s websitethe company is now seeking an “all-round Stockholm- or Oslo-based Nordics public policy and business development manager,” whose role will be to ensure that the “political, regulatory and fiscal frameworks” in the Nordics “support Tesla’s mission.”
Last week, Sweden’s Transport Workers’ Union said it would stop collecting waste at Tesla’s workshops in the country, joining dockworkers, truck drivers, electricians, cleaners and postal workers.
Swedish labor relations, shaped by a series of accords reached throughout the 20th century, mean that almost all pay is subject to collective agreements between companies and labor unions, without any government intervention.
Other Nordic countries have similar foundational principles, and therefore the majority of a population that represents a key market for Tesla are part of a union.
The workers are not making any demands on pay or conditions, but rather trying to strong-arm the company into signing an agreement largely considered a pre-requisite for doing business in Sweden and the surrounding region.
Tesla CEO Elon Musk is famously anti-union, and described action from Swedish postal workers to block the delivery of license plates to the company’s vehicles as “insane.” Tesla has not responded to a CNBC request for comment on this issue.
Most of the strikes will take effect in the coming days, but neither Musk nor the unions have shown any indication of backing down.
A ‘growing brush fire’
Dan Ives, managing director at Wedbush Securities, suggested the “WWE-like standoff” is increasingly becoming a “third rail” issue in Sweden and the wider region.
“While the Scandinavian situation is a contained situation that Tesla is battling, it’s an important lightning rod issue around unions globally,” Ives said in a note last week.
“With the Shawn Fain led UAW battle vs. Detroit which results in GM, Ford, Stellar giving into union demands, the next battleground could be Tesla.”
The United Auto Workers union in November launched an unprecedented campaign to organize 13 non-union automakers in the U.S. covering 150,000 workers, after securing record contracts with Detroit car manufacturers.
Ives said it is “very unlikely” that unions in the U.S. will have much success in going after Musk and Tesla in isolation. However, he suggested that if the company caves to the mounting front of Scandinavian unions, it could create a “growing brush fire that eventually gets to the UAW and U.S. into 2024.”
Will Tesla cave?
The unique stalemate pits the unstoppable force of the world’s richest man and U.S. corporate might against the seemingly immovable object of Scandinavian organized labor principles, meaning the outcome remains deeply uncertain.
George Kochanowski, global supply chain expert and CEO of U.S.-based shipping container firm Staxxon, noted that there are only two possible outcomes — either Tesla folds, or Scandinavian union solidarity falls apart and is forced to back down.
“I think that (Musk) will have to capitulate with time, but he won’t do it now. I think it’ll happen with time, unless the cost of energy continues to rise in Europe,” he told CNBC on Monday.
“It could spread, if the garbage men don’t take out the garbage from the maintenance shops and the dealerships, etc., but is there an ethical question here? Where do the dockworkers get the right to pick one thing to unload and load and not the other? That’s a tough one.”
This would suggest that other global automakers will be watching the situation closely, though many do manage to operate in the region without a hitch.
“The American corporate push is not as heavy a hammer as it used to be, and if you had a guy like Jack Welch from GEyeah, this would have never happened,” Kochanowski said.
Kochanowski also noted that the limited scope of Tesla’s product range for the general public in Scandinavia means it may not have the same bargaining power as a more traditional conglomerate.
“The American corporations, when you had a General Electric company that made everything from plastics to light bulbs and all the rest, they would understand the impact of that. Elon makes rocket ships, satellites, which you and I can’t see or touch, and a few cars,” he added.
“The implications of (the widespread solidarity strikes targeting a single company) is quite significant, because if (the unions) go take a lick of that lollipop and like it, they could think ‘maybe I don’t want to import this or that’.”