Organized labor ranks among Elon Musk’s least favorite things, right up alongside Wall Street short sellers and the mainstream media.
The world’s wealthiest man built Tesla into the industry’s dominant automaker despite what he believes has been fierce opposition from all three. Yet it is his steadfast refusal to play ball with trade unions that is his biggest headache of late.
Only weeks after labor leader Shawn Fain threatened to raise working conditions at Tesla with the help of his United Auto Workers, Sweden’s own industrial union IF Metall is bringing the company’s operations to a complete standstill in the Scandinavian country.
It’s the first time that Tesla’s operations have been hit by a strike.
“This is insane,” the entrepreneur grumbled.
Sweden is a major destination for Tesla cars, vying with the Netherlands as the fourth-largest market for electric vehicles in the European Union after Germany and France. More than 90,000 EVs have been sold through October, according to the industry’s own data.
This is insane
— Elon Musk (@elonmusk) November 23, 2023
More importantly, Sweden punches way above its weight when it comes to EV adoption, where it is currently the undisputed EU leader.
Nearly 39% of all new cars sold in the Scandinavian country are fully electric, triple the overall adoption rate in the EU through the first ten months. It is by far the most popular powertrain choice among Swedes, with conventional gasoline-only cars only amounting to 52,000 during the first ten months.
Tradition of collective bargaining
Even though Stockholm enjoys a higher per capita number of tech startups valued at $1 billion-plus in Stockholm than almost anywhere else in the world, the country still has a long tradition of collective wage bargaining.
As a result, when Tesla refused to agree to a wage deal with 120 mechanics at seven different workshops, IF Metall declared a strike in late October.
This has since spiraled out of control as more unions have since joined in, including dockworkers that now refuse to unload imported Tesla cars arriving in ports and even workers from the state-owned postal service responsible for delivering license plates.
In the short term, Musk can ill-afford sales in a key market to dry up. Investors are becoming increasingly anxious that his company cannot maintain the breakneck speed of growth, to which they have long become accustomed.
On the other hand, giving in could have long-term implications as he has thus far refused to play ball with unions.
Any compromise in Sweden would likely only embolden labor leaders in the U.S. and Germany to increase the pressure.
Responding to Musk’s frustration, Swedish parliamentarian Annika Strandhäll corrected the centibillionaire.
“This is the Swedish labor market model agreed on since almost a hundred years between employers and employees,” she wrote. “In Sweden all serious companies sign collective agreements.”