Tesla's Anti-Union Model Faces a Massive Challenge in Europe

A small strike by Swedish mechanics has snowballed, as postal workers and painters stage solidarity strikes and even Danish dockworkers try to cut off shipments. 

Johanna Englundh 12 December, 2023 | 4:05AM
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A Tesla dealership in Sweden

When Tesla TSLA's Swedish mechanics sought union talks, Tesla stuck to its usual line and turned them down. Instead of coming to nothing like past attempts to unionize at Tesla, a month-long strike has since hobbled the electric car maker's distribution in the country as workers even ouitside the automotive sector refuse to support Tesla's operations.

Now, the strike has gone international, as Danish transport workers say they will no longer ship Teslas into Sweden. Automotive unions in France, Germany and the U.S. are watching closely. 

The strike started in late October, after Sweden's IF Metall union had tried to get Tesla to accept collective bargaining for years. Tesla's refusal to negotiate with its Swedish mechanics “represents a substantial threat to the Nordic country's labor model”, IF Metall says. Soon after, several trade unions took industrial action in solidarity with the mechanics, refusing to perform labour that aids the automaker until an agreement is reached. The strike now involves mechanics, electricians, builders, dockworkers, postal workers, and painters.

With a workforce of 120,000 globally, Tesla has consistently resisted unionization, threatening workers with retaliation if they pursued it. Swedish union leaders have been vocal in condemning this.

"Elon Musk’s business model is to avoid respecting human rights. Now he is taken on by one of our strongest unions. We must defeat the Tesla business model, and Sweden is the best place to start”, said IndustriALL general secretary Atle Høie.

Unlike many other European countries, Sweden has no legally enforced minimum wage and little in the way of statutory labour market regulation. Instead, the system is essentially voluntary – a baseline for pay and other conditions, including pensions, is set by collective agreements. More than 90% of Sweden’s workforce are covered by one of these deals, which has resulted in a remarkably peaceful industrial landscape, even by Nordic standards. Sweden lost an average of 8,100 working days a year to industrial action between 2010 and 2021, against more than 120,000 in Norway and Finland.

Despite coordinated action between different unions in Sweden-- something that is technically illegal in many other European countries and the US-- Tesla quickly found ways around the different strikes, and continued to roll out new Teslas to Swedish buyers.

It was not until the Seko trade union announced their solidarity measures that things really got intense for the electric car manufacturer. Seko's strike involved a blockade against the delivery and collection of shipments, letters, packages, and pallets made by PostNord and CityMail to all of Tesla's facilities in Sweden. In other words, new Tesla's can't even get Swedish license plates.

On Tuesday, Danish dockworkers represented by 3F, Denmark's largest union, refused to help transport U.S.-made Tesla vehicles to Sweden. 


Tesla's CEO and largest individual shareholder Elon Musk took to social media platform X, which he owns, to denounce the blockade against mail deliveries as “insane”.

The automaker filed two separate lawsuits against the Swedish Transport Agency and PostNord AB — Sweden's postal service — as a response to the union of postal workers' refusal to deliver license plates. While one court favored Tesla, another rejected it for so-called interim security measures. No final verdict has been presented as of yet, and Teslas are still missing their license plates.

A Sweden Without Tesla

The battle between Tesla and the unions has sparked a polarized debate in Sweden. Independent economist Claes Hemberg argues that the trade union IF Metall has lost the plot in its fight against Tesla.

"I don't think it is the union's role to chase companies out of Sweden. I think they have misunderstood their role and have identity problems”, he told financial daily Dagens Industri.

Günther Mårder, former CEO of business lobby group Företagarna, agrees with Hemberg:

“The mafia-like measures that we now see both IF Metall and the sympathizing unions carry out against Tesla make me worried. All other agreements signed under duress and threats are rightfully declared void. Why is it both valid and accepted when unions are involved?”

The unions don't look like they're about to back down, ready for a Sweden “without Tesla” as they ramp up coordinated industrial action. If they succeed, this could be a tremendous symbolic victory, which would strengthen the hands of union movements vis-a-vis Tesla on both sides of the Atlantic.

AMF, one of Sweden’s biggest occupational pensions companies with SEK 755 billion under management, has sent a letter to Tesla’s American board demanding improvement and that they “adopt to the customs of the country”. AMF is one of the largest Swedish institutional owners of Tesla, with shares worth around 337 million dollars at the start of December according to Morningstar Direct data.

Despite its Union Battle, Tesla Sales Hold Strong

Tesla managed to come second in the list of most-sold cars in Sweden in November, with 1,236 new Tesla Model Y registrations, showcasing the automaker's resilience despite its battle with unions. Throughout 2023 the Model Y has dominated the new car market, scoring 3,675 more registrations than the country's second-most popular model, the Volvo XC40 compact SUV.

Swedes love Teslas, but its annual sales there, dwarfed by those in the U.S., China and Germany, aren't a make-or-break issue for the company. Instead, the current union standoff could prove a bellwether for its labour relations globally.  

Global Interest

In Germany, Tesla’s largest European market and home of its Grünheide factory where roughly 10,000 employees make EVs and batteries, workers are closely watching the union battle in Sweden.

IG Metall, Germany’s largest and most powerful union, says that members employed at the Tesla factory have complained about poor working conditions, extreme workloads and excessive production targets. Wages are estimated to be about a fifth lower than they would be under a collective agreement, according to IG Metall.

“Just a couple of weeks ago, over 1,000 workers at the Tesla factory in Grünheide declared their dissatisfaction with the existing working conditions by wearing an IG Metall button on their clothing during their shifts. By doing so, they broke Tesla's climate of fear once and for all. This action was taken in the same spirit as our Swedish colleagues in IF Metall's strike”, said IG Metall's Dirk Schulze at the end of October. But German laws prevent any solidarity strikes, despite requests from their Swedish counterparts.

Employees in the US have also frequently complained about working conditions at Tesla. It's the only major US auto manufacturer not represented by a union in the US, and the United Auto Workers (UAW) have tried to organize at Tesla for years.

Branislav Rugani, the international confederal secretary of French union Force Ouviere, has also said that what is happening in Sweden will influence what happens around the world.

“As a French trade unionist, I completely agree with the union strike in Sweden,” Rugani said. “Eighty percent of workers are covered by union agreements. We can’t let a foreign company come to European soil and disobey the rules we’ve put in place. If we let them come in, and they refuse to negotiate—it’s the beginning of the end. Workers’ rights would be lost.”

How Might This Impact Tesla Shares?

In facing off with its Swedish mechanics, Tesla may have placed itself at a pivotal juncture where the future of its business model will be decided. 

Investors must keep a close eye on the events unfolding over the next weeks and months. It will either result in a success for the Swedish unions, heaping pressure on Tesla in all other markets where they have been fighting the same battle for years. On the other hand, if Tesla remains steadfast, the Swedish unions are likely to intensify efforts to drive Tesla out of the country. 

Morningstar analyst Seth Goldstein is optimistic it won't come to that: "I'd imagine Tesla is negotiating with its union in Sweden to come to a resolution and I would expect the two sides will eventually reach an agreement. As a result, I don't see a huge impact to Tesla."

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Tesla Inc249.19 USD3.39Rating

About Author

Johanna Englundh  is an editor for Morningstar in Sweden.

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