As Tesla Inc. . Elon Musk is building his first European car factory in a forest outside Berlin and is on a relentless charm offensive. He is committed to creating thousands of jobs. he tweets in surprisingly good German; and during the site’s topping-out ceremony in September, he donned a heavy-duty drawstring vest and wide-brimmed black felt hat traditionally worn by local artisans.
The news was received very positively. Politicians have been quick to track permits for the factory and locals have been looking for jobs in a region struggling to attract investment. On Nov. . 30, the Tesla CEO rushed to the German capital for the third time in as many months to receive an award for his entrepreneurial achievements from the publisher of the influential Bild tabloid.
But there is a corner of the German economy where the love festival feels more like a stalemate: the powerful 2. 3 million members of the IG Metall union. The group is on a collision course with the billionaire who is either threatening to undermine Musk’s ambitions or diminishing the role of an organization that has long played an oversized role in the country’s auto industry with its demands for better wages and policy changes due to the very real risk of strike.
The conflict focuses on Tesla’s refusal to sign the collective agreements common in Germany. After the company ignored a letter from IG Metall seeking dialogue, things slowly got difficult. During a protest in Berlin, hundreds of workers condemned Tesla’s poaching by a key manager at Daimler AG. And a local union leader issued a statement urging Musk not to view wage deals as « the devil’s work » but as essential to maintaining peaceful industrial relations. « It is not good for an automobile manufacturer to be in permanent conflict with IG Metall, » says Christian Bäumler, deputy chairman of a faction that is affiliated with the workers in Chancellor Angela Merkel’s party. “The union has organizational power, it has money, it has experience. It can take a long struggle. ”
Musk also has a lot of power, experience, and above all money – in November he surpassed Bill Gates as the second richest person in the world – and he rarely backs down from a fight. Since his factory rises quickly from the sandy property next to the Berlin autobahn, he has succeeded in neutralizing the bureaucratic resistance that can slow down large projects in Germany. He has eagerly courted high-ranking officials such as Economics Minister Peter Altmaier, who promised everything that was necessary to get the plant up and running by mid-2021. Local authorities swiftly granted subsidies and stamped building permits and seized what they believed was a great opportunity to boost growth. Musk’s pressure to go electric has sparked a « successful revolution » in the auto industry, Altmaier said at a conference in November. 24. “Without him we would never have achieved this. ”
The Tesla plant, Germany’s first new automobile plant in two decades, promises to create up to 40. 000 jobs in East Germany, a region which lost most of its heavy industry during World War II and which has withered during the decades of separation. It is being built as domestic manufacturers and suppliers lay off tens of thousands of workers to switch to battery-powered vehicles, which have fewer parts to assemble by fewer workers. The location is central to Tesla’s European growth plans and sends a signal to BMW, Daimler and Volkswagen that the U. . S.. . Upstart, whom they have long belittled or ignored, has arrived on their doorstep.
Musk is not a fan of organized labor. When an employee at Tesla’s California facility asked United Auto Workers for union formation assistance in 2017, Musk posted an email indicating that the man was trying to undermine the company and later implied that the organization of the factory would mean no more stock options. A judge reprimanded Tesla last year for repeatedly violating the National Labor Relations Act. The company has appealed this ruling, stating that it was the result of a “smear campaign” by the union and not based on the facts.
IG Metall worries that Tesla will follow in Amazon’s footsteps. com Inc. . that has expanded in Europe’s largest economy despite years of unionized protests without signing wage agreements for its warehouse workers. Musk wants to run his work like a Silicon Valley startup, attracting workers with unregulated salaries and stock options as well as promising perks like a party room with a “Mega Rave Cave” and a sound system the size of a car. If successful, it could jeopardize IG Metall’s ability to get what it wants from other automakers.
The power struggle is at a delicate point for the union as its members are at risk of losing the secure jobs that the automotive world has promised for decades. While German auto managers are negotiating tough cuts with IG Metall to finance investments in electromobility, they could point out lower costs at Tesla and increase pressure on union officials to curb their demands.
Musk has already helped give a more confrontational tone to German executives who have long been held back by unions. VW boss Herbert Diess, an outspoken fan of the Tesla boss, has repeatedly clashed with IG Metall and complained about what he calls the « old, encrusted » structure of the world’s best-selling car manufacturer. The suppliers Continental AG and Schaeffler AG have vowed to cut thousands of jobs and to close or sell factories, despite heavy criticism from the unions. And Oim Källenius, CEO of Daimler, has drawn the wrath of workers by stamping out some open-ended contracts in favor of more flexible arrangements.
Despite the threat that Musk’s company poses to the major German automakers, his foray into the birthplace of the internal combustion engine could ultimately be a boon for an industry that can only change slowly, says Ferdinand Dudenhöffer, head of automotive research at the university Duisburg-Essen. In contrast, there is little benefit to unions as the arrival of Musk poses a growing threat to a model that may have run its course. « Our corporate culture tends to keep things the way they always were, » says Dudenhöffer. “Musk is someone who can break this open, and that is the greatest opportunity here – also for the German automaker. Read on: Ex-Tesla factory worker pays 400. $ 000 for feud with Musk
Elon Musk, Tesla, Inc. .
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