Tesla strike is a culture clash: Swedish labor versus American management

The Tesla engineers who quit their jobs in Sweden say they still support the mission of the American company and its high-profile CEO. But they also want Tesla to accept the Swedish way of doing business.

They call it the Swedish model, a way of life that has shaped the country’s economy for decades. The focus is on cooperation between employers and employees to ensure that both parties benefit from a company’s profits.

Instead, said four technicians who left their jobs on Oct. 27, they have been subjected to what they describe as a “typical American model”: six-day work weeks, unavoidable overtime and an unclear evaluation system for promotion.

“Just work, work, work,” said Janis Kuzma, one of the striking technicians.

The union representing Tesla workers, IF Metall, will not say how many of the company’s 130 engineers have walked out – it could be as few as a few dozen. The company’s ten service centers remain open.

But as the strike enters its third month, it is having an outsized impact on the Nordic region. At least 15 other unions have taken action to force Tesla to negotiate a collective bargaining agreement to set wages and working conditions that reflect standards across the Swedish sector. Daniel Ives, an analyst at Wedbush Securities, warned that the dispute is becoming “a major lightning rod issue around unions worldwide” for Tesla and its CEO, Elon Musk.

Polls show a majority of Swedes support the strike, which is widely seen as a defense of the country’s consensus-based way of doing business. Nine out of ten people in Sweden work under an employment contract, and strikes are relatively rare. But as the strike continues, questions are being raised about whether Sweden’s reliance on labor contracts denies companies flexibility and agility.

That divide is reflected in the reactions of some of the country’s roughly 50,000 Tesla owners, who see the strike as a power play by a wealthy, politically influential union.

Mr Musk has resisted attempts by his 127,000 employees around the world to unionize.

The company has declined repeated requests for comment. At a service center in Malmö this month, employees wearing Tesla shirts were busy driving cars in and out. Strikers at the picket line said some of the workers appeared to be recent hires.

Rumor has it that some Tesla owners have been unable to find someone to replace their tires for the winter – essential for driving in Sweden at this time of year.

But fearing that the strike has been little more than a nuisance for Tesla, IF Metall has asked for support from other unions.

Unions in Denmark, Norway and Finland, as well as Sweden, have backed IF Metall. This means that dock workers have stopped unloading Teslas that arrive by ship; union members at independent repair shops have stopped servicing Teslas; postal workers have stopped delivering Tesla’s mail, including license plates; and electricians have pledged to no longer repair Tesla’s charging stations.

It may be too early to say how much damage these measures will do to the company. So far, new car registration numbers do not show that the strike is negatively affecting sales. Tesla’s Model Y is poised to become the most popular vehicle in Sweden by 2023, with more than 14,000 cars sold through October, according to official statistics.

The company also appears to have found a loophole to bypass postal officials’ blockade by ordering license plates to be shipped directly to customers.

Still, some potential buyers are concerned that despite Tesla’s promise to continue doing “business as usual,” they won’t get their cars in the promised five to eight weeks.

“I don’t want to commit yet,” said John Khademi, a Tesla owner who decided to postpone ordering a new one. “I’ll just wait and see how it turns out.”

The solidarity strikes have led to division. Some companies that have no direct interest in the strike, such as independent car repair shops, have lost business because they have collective agreements with IF Metall that require them to reject cases related to Tesla. Under Swedish law, if a union calls a solidarity strike, its members must go along with it.

“Then those companies lose a lot of money and they are really frustrated,” said Mattias Dahl, the deputy vice-president of the Confederation of Swedish Enterprises, which represents 60,000 companies.

Some believe that these solidarity actions have gone too far. “There is no equality here anymore,” US CEO Prime Minister Nilsson said Timbroa Swedish think tank that promotes libertarian ideals and the free market.

He pointed to Spotify, the streaming audio giant founded in Stockholm in 2006, as another company that operated in Sweden without a collective agreement. Like Tesla, it comes from a start-up culture.

“Companies in the Swedish labor market should be able to exist without a collective agreement,” said Mr Nilsson.

Neither side has indicated it is willing to withdraw. IF Metall, which represents workers in other heavy industries, has built up its war chest in recent decades. It offers strikers 130 percent of their wages.

Tesla also has deep pockets — the company is valued at about $817 billion — and says it offers wages and benefits equal to or better than those in a collective bargaining agreement, including offering stock options as a lucrative incentive.

Tesla showed its willingness to fight by suing both the Swedish body responsible for car registrations and the postal service after the license plates were stopped. The lawsuits, which were filed in November, are continuing.

Collective bargaining, not law, regulates workplace conditions in Sweden. The country has no legal minimum wage.

Strikes are unusual because once an employment contract has gone into effect, the union cannot call one. This peace guarantee has helped keep the number of strike days in Sweden at one of the lowest levels in Europe – just over two working days per year lost to strikes and lockouts per 1,000 workers from 2010 to 2019, compared to 55 in Norway and 128 in France, according to one study.

Marie Nilsson has been a member of IF Metall for more than 40 years and took over the reins in 2017. She remembers joining the picket line in 1995 to support workers going on strike against Toys “R” Us, the last major American company. which rejected a collective agreement. But the action against Tesla is the first time it has called a strike.

“It is the workers who form the union,” she said. “It’s not someone from the outside.”

She pushed back against Tesla’s argument that it offers terms equal to or better than what workers would get under a collective bargaining agreement. “This is never the case,” Ms Nilsson said.

Four engineers who described their reasons for striking said they admired Mr Musk. One of them raved about how the extended battery in the new Cybertruck will be a game changer, and Mr. Kuzma drives a Model Y. But they all agreed that Mr. Musk was such a genius at revolutionizing electric vehicles, that he was taking on a country that values ​​consensus, and that it would be wrong to lump the Swedish model in with the United Automobile Workers, the American union that took a hard line during a recent strike took a stand against the Big Three automakers in Detroit.

“IF Metall is not the UAW,” said one engineer, who declined to give his name because he said he hoped to return to his job at Tesla after the strike and feared repercussions if he spoke out. “You have to know how different unions work in different countries.”

The strike receives regular attention in the Swedish media and is featured in television debates. The discussions have become polarized, pitting Tesla fans and owners against the union and its members.

Some Tesla owners describe the strike as a publicity coup and a demonstration of the union’s overreach. They point to the dozens of technicians who remain on the job, including some who have not joined the union, as a sign that they are happy with their jobs.

“If working conditions were that bad, they would all have stopped,” said Ulf Siklosi, who drives a Tesla Model S. “Or they would all join the union.”

Daniel Schlaug, co-Model S owner and investor in Tesla, said the company had sent letters telling owners that 90 percent of Tesla employees were still working, a figure that could not be confirmed.

Mr. Kuzma and several colleagues said they were frustrated by the criticism from Tesla owners. “They don’t understand it’s about them,” he said. “If the pressure on workers is too much, they won’t repair their cars properly.”

Last week, institutional investors from Sweden’s Scandinavian neighbors – who together manage $1 trillion in assets – sent a letter to Tesla’s board saying they were “deeply concerned” by Tesla’s stance on worker rights in Sweden and asking for a meeting early next year.

Ms Nilsson would also like to speak to Mr Musk. When asked what she would say if he called her, she replied: “I would love that.”

“I would say, ‘Let me explain and let me hear what your expectations are,’” she said. “Let’s talk about it.”

Christina Anderson reporting contributed.