Tesla, facing growing unionization drives in Germany and potential similar initiatives in the U.S., has announced wage increases for its factory workers in Germany. The decision was unveiled during CEO Elon Musk’s recent visit to the Gigafactory located just outside Berlin, reports the Wall Street Journal.
Tesla’s German management disclosed a wage hike package for its workers during Musk’s visit. This move comes as the company grapples with challenges from Germany’s influential IG Metall union, which is pushing for a union contract at the plant.
In Sweden, a smaller industrial union representing Tesla service workers is currently on strike, advocating for a collective bargaining contract. Meanwhile, the United Auto Workers union in the U.S. is also setting its sights on Tesla’s American factories, following significant contract wins from Detroit automakers.
Unionization could potentially elevate Tesla’s labor costs, especially as the company grapples with profit pressures and adjusts prices in light of decelerating growth. Tesla informed its German employees of a 4% wage increase effective in November for its approximately 11,000 workers at the plant.
An additional €1,500 bonus will be provided in December to counteract inflation. Starting February, production workers will receive an extra annual wage boost of €2,500. This follows a 6% wage increase after the plant’s inauguration last year.
Musk confirmed during his visit that Tesla’s upcoming next-generation electric car would be manufactured at the German facility after a planned expansion in 2023. Despite these advancements, Tesla remains the sole major automaker in Europe without union representation at the factory level. Currently, Giga Berlin manufactures the Model Y.
Last month, IG Metall reported that 1,000 employees at the plant showcased union badges at work and voiced concerns about working conditions. Looking ahead, IG Metall is now concentrating on the election of a new works council at Tesla next year, a labor representative committee with significant influence over company policies.
On the international front, Tesla service center workers in Sweden have been striking since late October, urging Tesla to sign a collective bargaining agreement with the IF Metall industrial union. The Swedish Transport Workers’ Union has threatened to back the striking workers by blocking Tesla vehicles entering Sweden’s primary ports.
