Danish dockworkers are showing their support for Swedish mechanics in their ongoing dispute with Tesla, potentially causing further disruptions to the electric vehicle maker’s supply lines. While Tesla stock has not been affected yet, this situation remains a concern for investors.
The 3F Transport union in Denmark announced on Tuesday that it will commence a sympathy strike in two weeks. As a result, Tesla will be unable to transport cars to Danish ports and subsequently distribute them to Sweden via trucks. Additionally, other unions in Sweden and Norway, including postal workers responsible for delivering Tesla license plates, have also initiated sympathy strikes.
The disagreement between approximately 130 mechanics in Sweden and Tesla has been going on for approximately six weeks. It revolves around the mechanics’ right to engage in collective negotiation rather than specific demands concerning pay and working conditions.
Elon Musk, the CEO of Tesla, expressed his disagreement with the concept of unions last week, deeming the strike “insane.” Musk believes that unions tend to foster negativity within a company and create a divisive environment between workers and management. He prefers a collaborative atmosphere where all parties are on equal footing. In line with this, Musk mentioned that many line workers at Tesla receive stock-based compensation, with several of them becoming millionaires through their Tesla holdings.
Solidarity Across Borders: Trade Unions and Tesla’s Labor Disputes
In a recent statement, 3F Chairman Jan Villadsen emphasized the importance of solidarity in the trade union movement, stating, “Even if you are one of the richest people in the world, you can’t just make your own rules.” This sentiment is particularly relevant amid ongoing labor disputes between Tesla and various unions.
Marie Nilsson, the head of the IF Metall union aiming to represent Tesla mechanics, warns that Sweden’s economic model hangs in the balance if CEO Elon Musk continues to avoid engagement with unions. While the repercussions for Tesla have been relatively minor thus far due to Sweden’s small market for electric vehicles, the situation could escalate rapidly if strikes spread to Germany. Not only is Germany home to one of Tesla’s largest factories, but it also boasts the largest car market in Europe.
Interestingly, some Tesla workers at the German manufacturing plant have already joined the IG Metall union, which represents employees in multiple manufacturing industries. It is important to note, however, that labor unions operate differently in Germany compared to the United States.
The potential consequences of labor disruptions in Germany remain uncertain. Despite reaching out for comment, Tesla has not responded, leaving many questions unanswered.
It is worth highlighting that the European labor situation has not yet impacted Tesla’s stock. As of Tuesday’s trading, Tesla shares have experienced a 7% increase over the past month, surpassing the 5% gains of both the S&P 500 and Nasdaq Composite. Nevertheless, Tesla shares dipped by 0.6% in premarket trading on Tuesday, as did Nasdaq Composite futures.