Labor Demands

Germans Throw Spanner in Tesla Works

FILE PHOTO – Tesla Motors’ mass-market Model 3 electric cars
Tesla Motors' mass-market Model 3 electric car. Source: Tesla Motors/Reuters

What was shaping up to be a banner project for billionaire wunderkid Elon Musk and electric carmaker Tesla Motors could end up with wheels spinning thanks to a German labor dispute.

According to a report by German newspaper Welt am Sonntag, employees of Tesla’s industrial robotics unit are threatening to strike. Employees of Grohmann Engineering, a mechanical engineering firm acquired by Tesla in November 2006, want to renegotiate for higher salaries and job security.

Grohmann specializes in automating factory production, making it an essential arm to the release of the Tesla Model 3, the world’s first mass-market electric car due out in July. The $35,000 (€32,700) sedan could be Tesla’s ticket out of the luxury sphere and into the garages of a more widespread audience. Around 400,000 Tesla Model 3s have already been pre-ordered, and the company has plans to ambitiously increase production capacity from 84,000 to 500,000 next year.

Tesla’s sacred investor confidence could now be riding on negotiations with Germany’s largest industrial trade union, IG Metall, on behalf of around 600 Grohmann employees in Prüm, a small town close to the Belgian border.

In a peace offering, the electric carmaker offered to raise the salary of all Grohmann employees by €150 per month and announced €10,000 worth of Tesla shares for them over four years. The union has stated this isn’t enough, claiming that workers are being paid a good 30 percent below union wages.

“We continue to work directly with Tesla Grohmann employees and are prepared in the event there is an action initiated by the union,” Tesla said in a statement to the Wall Street Journal. “We don’t anticipate any impact on the Model 3 timeline.”

 

Barbara Woolsey is a writer for Handelsblatt Global in Berlin. To contact the author: b.woolsey@extern.vhb.de