Tesla’s Advanced Automation group continues work on Model 3 lines as union loses popularity

While Tesla’s acquisition of Grohmann Engineering to create Tesla Advanced Automation Group gave an opportunity for German union IG Metall to make a push to unionize the workforce, the effort seems to be slowing down.

After CEO Elon Musk got personally involved following threats of a strike last week, sources at Grohmann told Electrek that the union is losing ground and some workers are even canceling their membership. 

The transition sparked some concerns among some of the ~700 employees, which was accentuated when Tesla dropped all of Grohmann’s existing clients in order to have all hands on deck for the Model 3 production lines.

Around the same time, founder Klaus Grohmann retired, which Reuters is now presenting as him being “ousted” because he disagreed with the move, while Tesla says that the acquisition was part of his retirement plan.

It enabled the union the gain stronger footing in the company and reach about 50% membership in the workforce to start collective bargaining with the company.

As we reported last week, we learned that CEO Elon Musk held a Q&A with the Tesla Grohmann employees earlier this month to hear their concerns and sent them a letter last week with an updated offer – we obtained the letter and included it in full below.

We now learn from sources at the company that Musk’s involvement reassured the workers and IG Metall is losing support for a strike and memberships. The union held a press conference yesterday while Tesla issued a statement to employees expressing that they prefer to work directly with the company’s Worker Council than with the union.

The issue with job security after Tesla ending the relationships with Grohmann’s former client seems to have been resolved by Musk’s promise to keep jobs in Prüm. As for the issue of compensation, it seems to come down to the details at this point – especially on whether employees will accept stocks or cash payments.

Tesla’s negotiation directly with the worker council led to the authorisation to allow more hours as the group is working around the clock on the Model 3 inverter production lines, which are scheduled to ship by the end of May.

As we reported yesterday, Tesla also received a large shipment of robots for the Model 3 production lines in Fremont. It seems to all be coming together, but the clock is ticking for the start of Model 3 production in July.

Here’s the letter from Elon Musk to Tesla Grohmann employees that seems to have calmed the tensions (writing by Musk in English, then translated into German and then back in English):

Tesla Grohmann – Mail from Elon
I am very grateful that last Thursday I had the opportunity to talk to you and I wanted to give you some additional thoughts.

Tesla is unlike most other companies. Unlike other companies, the existence of Tesla is not only to make money. If it were only about this one goal, then I can tell you that the founding of a completely new car manufacturer would definitely not have been the smartest way. Our foundation and the foundation of everything we do is to accelerate the advent of sustainable energy. The welfare of our planet is in great danger, and in order to solve this problem, we need a sustainable solar energy production, we need a sustainable way to store the energy in stationary batteries and we need a sustainable way to consume this energy with electric vehicles. It is critical of the future of humanity to solve this problem – we all want a better world for future generations.

Tesla has made a number of important steps towards achieving this mission in the last 14 years of our existence, but none is more important and can make a bigger difference than Model 3. For the first time ever, there will be an electric vehicle that people can afford and which people love. When Tesla was founded, no one thought that an electric vehicle could ever be more than a golf cart. Today, Model S is the best-selling vehicle in its class. Model X is fast to pick up and recently won a golden steering wheel. And Model 3 is on the brink of production start – just one year after the most successful product launch ever. After the Model 3, many other vehicle products will come, for which Tesla Grohmann will play a key role. To name just a few, which have already been publicly announced (there will be many more): We are developing Model Y (an affordable mid-range SUV), a heavy-duty semitrailer, a pickup and the next generation of the roadster sports car.

And these are only the cars. Tesla is about to launch a new solar roof into the market that will completely change the importance of the use of solar energy. Tesla will soon produce more batteries than the entire world has produced in 2013. These batteries will enable everything to be operated with sustainable energy, including the cars we manufacture. I was never more optimistic about the future of Tesla. Although it is not what drives us, Tesla has the real potential to be one of the most valuable companies in the world.

We bought Tesla Grohmann because we believe that Tesla Grohmann will play an important role in creating this future. It is not enough to produce cool products. To be successful, we need factories that are as good as the products themselves.

This brings us to the current topics at Tesla Grohmann:

First, the question of trust and the longing of every employee for job security. I understand that you are concerned about our decision to focus on Tesla projects instead of serving external customers. We have made this decision, because just so much work has to be done on critical Tesla projects. We really have so much to do that we will be able to hire even more extraordinary talents, and we plan not only an expansion of the team, but also our production facility in Prüm. For all these reasons, I would like to assure everyone at Tesla Grohmann that we will not be able to reduce our workforce in the foreseeable future, Even after these five years, we are expecting further growth at Tesla Grohmann and do not expect any personnel reductions. However, we wanted to give you absolute security for a definite period of time. This is a promise you can rely on and I will ensure that it is also formally implemented.

Second, on remuneration. Last week, we announced that each employee at Tesla Grohmann Tesla will receive shares worth 10,000 euros (US $ 10,000), distributed quarterly over the next four years, and an immediate bonus of more than 1,000 euros in cash. This is just the beginning for each Teammitgled. We will also enter into discussions immediately with the works council to ensure that the remuneration of each individual employee is competitive and corresponds to the local cost of living. Of course, no one at Tesla Grohmann should earn less than he can expect on the local labor market; Just as no one would reasonably require the remuneration in Prüm to be as high as in cities like Stuttgart or Munich, where the cost of living is much higher. In any case, every Tesla Grohmann employee will have the chance to earn considerably more salaries and shares than is usual in the industry and relative to the cost of living in Prüm. Unlike other automotive manufacturers, each Tesla employee receives Tesla shares in addition to salary. These shares can be easily sold for money, but they also open up the possibility of earning much more through stock appreciation. The tenfold increase in our share price over the past five years has made our shareholding exceptionally profitable for our Tesla employees. I firmly believe that we have the potential for a further ten-fold increase over the next five to ten years. That would make a total value of € 100,000 from the share of the share of € 10,000. Although we would not recommend it to anyone, because it is very likely less worthwhile, all those who would rather have a simple cash bonus, instead of the shares, would demand 2,500 euros in cash every year. Tesla firmly believes that extraordinary performance must be rewarded with additional cash and share bonuses. So this is only the beginning.

Thirdly, it is clear that you would like to see more changes at the workplace. At Tesla, we are proud to offer a pleasant, fair, and exciting work environment. It is very important for me that you like to work every morning. We have drawn up a long list of change measures to bring Tesla Grohmann to the conditions at other Tesla locations, as well as changes that are specific to Tesla Grohmann and which we are now trying to implement. This list will be visible in all buildings visible to all. We will update the list on a regular basis so that everyone can see what changes have already been made, which are currently being implemented and which will be implemented soon. You should see every week that improvements happen.

Finally, I know that IG Metall wants to bring the workforce of Tesla Grohmann on the union line. I would like to share my thoughts with you. It is my firm belief that the separation of the workplace into “executives” and “employees” does not create a good working environment. We want to create a system of equality without artificial barriers so that someone can start as a trainee and one day lead the entire company. This is why we eliminate all the special privileges of the executives. For example, everyone will have equal access to parking, eating the same tables, and there will be no management offices. I am convinced that managers should work at the forefront, in the same work environment as the entire team. Even though I run the company myself, I still do not have my own office and often moved my workplace to the most challenging area in the factory and slept on the factory floor when there was a real crisis. Managers should always take care of their team before they take care of themselves – the supervisor is there to serve his team – not the other way round.

As I said at the beginning, everything at Tesla serves our mission and I do not believe that IG Metall is sharing our mission. They have publicly announced in the press that electric cars do not take care of them. In addition, they have a real conflict of interest because their top priority will always be the members of the hugely established automotive manufacturers: their potential of membership is much greater than at Tesla Grohmann.

I would like to thank you for all the contributions you have made to Grohmann over the years. I look forward to what we can create as a tightly integrated team together.

Elon