Tesla avoids German union at advanced automation group, agrees to salary increase

The German union IG Metall tried to get into Grohmann Engineering after Tesla acquired the company for “about $150 million” and turned it into ‘Tesla Advanced Automation Group’ last year.

Tesla strongly opposed the union push and instead tried to negotiate directly with its own workers. Now the company has reportedly come to terms with employees and agreed to an important salary increase.

The head of the workers council at Tesla Grohmann Automation, Uwe Herzig, told Germany’s WELT:

“We have developed our own remuneration structure in very pragmatic discussions.”

The new structure reportedly includes a roughly 30% salary increase, a previously reported one-off payment of ~$10,000 in cash or Tesla stock over 4 quarters, and job guarantee until at least 2022. They are going to be sharing all the details of the agreement with employees today.

After Tesla acquired Grohmann last year, 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.

As we previously reported, the group focuses on making automated production lines and they were specifically making new inverter production lines for Model 3.

Sources familiar with Grohmann’s clients told Electrek that Bosch and several German automakers were the company’s biggest clients and the most affected by Tesla’s cancellations of the contracts – though Tesla later said that they would fulfill their obligations.

Around the same time, founder Klaus Grohmann retired and IG Metall tried to reach about 50% membership in the workforce to start collective bargaining with the company.

We reported on CEO Elon Musk holding a Q&A with the Tesla Grohmann employees earlier this month to hear their concerns and he later sent them a long email explaining why they shouldn’t join the union.

Musk argued that IG Metall doesn’t share Tesla’s mission and he expressed doubts that “they care about electric vehicles.”

Now it looks like they successfully managed to avoid unionization of their new engineering group and instead, they are working directly with the company’s own worker council.