As we reported on Sunday, Tesla’s negotiations with the union at its newly acquired ‘Tesla Advanced Automation Germany’ escalated to threats of a strike.
This week, CEO Elon Musk got personally involved to try to defuse the situation as the group is just weeks away from shipping its Model 3 production lines.
Before Tesla’s acquisition of Grohmann Engineering to create the automation group, the company wasn’t bargaining with IG Metall, Germany’s most powerful workers union, even though they had over 100 members in the company.
The union generally doesn’t start collective bargaining with a company until it has achieved about 50% membership in the workforce, which consists of about 680 employees for Grohmann.
But after the acquisition by Tesla, IG Metall made a push to unionize more Grohmann – now ‘Tesla Grohmann’ – employees and managed to reach its threshold to start a collective bargaining effort with Tesla.
At first, it seemed like the biggest issue had to do with compensation. Workers were asking for a pay increase of 400 euros per month, while Tesla was offering 150 euros and stock options in the company, but it now evolved beyond compensation and into a job security agreement.
The concern stemmed from Tesla dropping all of Grohmann’s existing clients in order to have all hands on deck for the Model 3 production lines.
Electrek has learned that ‘Tesla Grohmann’, or ‘Tesla Advanced Automation Germany’, has been working on two production lines for the Model 3’s inverter. The lines, which sources say are scheduled to ship in the next few weeks, are crucial to volume production of the Model 3.
Some employees expressed concerns over losing what they saw has job stability from having several important clients, like Bosch, Daimler, and BMW, but it also gave an opportunity to IG Metall to use the apparent urgency to deliver the Model 3 lines as a potential bargaining chip to expedite a favorable labor agreement with Tesla.
We learned that CEO Elon Musk held a Q&A with the Tesla Grohmann employees last week to hear their concerns and sent them a letter this week with an updated offer.
Musk said that on top of the 150 euros per month increase, employees will each get a one-time 1,000 euros bonus and 10,000 euros in Tesla shares vested over four years. As for the job security aspect, Musk wrote:
“I would like to assure everyone at Tesla Grohmann that we will not reduce our workforce or make redundancies for the foreseeable future, and absolutely not for the next five years. Even after these five years, we expect further growth at Tesla Grohmann and no staff reduction.”
The letter was apparently well-received among employees, who Tesla is talking to directly, but we have reached out to IG Metall for comments on several occasions without a response.
In his letter, Musk said that he “doesn’t believe IG Metall shares Tesla’s mission”. It’s important to note that IG Metall is the largest union in Germany and has strong ties with German automakers and the United Automobile Workers (UAW), which is trying to unionize Tesla’s Fremont factory in the US.
There could be some tensions between third-parties not directly related to Tesla’s agreement with its workers in Germany.
There’s still a chance for a strike, but Tesla is confident that even if it does happen, it will not affect the production of the Model 3. If IG Metall calls for a strike, it will not affect all employees and Tesla also has people from California in Prüm to help with the final preparations to deliver the inverter production lines.