Tesla may have picked an unwinnable fight with Sweden’s powerful unions | Martin Gelin

For the first time anywhere in the world, workers for the US carmaker Tesla have gone on strike. It’s not a coincidence that this strike is happening in Sweden, which has one of the strongest labour movements in Europe. More than 90% of workers are protected by collective bargaining agreements, and the system has strong backing among employees and employers alike. With good reason: the Swedish labour relations model has sustained relative industrial peace between wage-earners and corporations for decades.

By refusing to play ball, Elon Musk’s car giant may have picked an unwinnable fight. What started as a minor local disagreement has grown to the point that it could have global implications, with potential ripple effects for labour movements and auto workers across Europe and the US.

Tesla doesn’t manufacture cars in Sweden, but it does operate workshops to service its cars. The dispute began when a group of 130 disgruntled mechanics had their request for a collective bargaining agreement rejected. As is customary in Sweden, unions in other sectors came out in solidarity. Dockworkers, mail and delivery workers, cleaners and car painters have so far all agreed to refuse to work with Tesla products. Stockholm’s largest taxi company has also stopped buying new Tesla cars for its fleet. Their fight against Tesla’s anti-union business model could now spread to Germany, where Tesla runs factories and has a significantly larger workforce. The powerful German union IG Metall has said that it is ready to launch collective bargaining negotiations if the workers demand it.

Tesla and other US corporations have certainly misjudged the situation if they expect special treatment in Sweden. Much about Swedish society has changed in the past few decades, but strong support for collective bargaining agreements is still considered the backbone of the country’s economic model.

Minimum wage rates and benefits are generally not regulated by law, but in negotiations between unions and employers in each sector. It has mostly worked well: Sweden has fewer strikes than its Nordic neighbours. This is because the unions are so strong they only need to call for industrial action as a last resort. Despite the rightwing government currently in power in Sweden, calls to change the employment model are rare.

Foreign and domestic tech giants have tried to challenge the system, but these attempts are now more likely to backfire. The financial tech company Klarna recently had to give way after several years of attempting to resist collective bargaining agreements, and settled with employees in a victory for white-collar unions. There is increasing pressure on Spotify to do the same.

Instead of importing the US’s lax labour standards to Sweden, Tesla may end up jeopardising its own business model. In the US, Tesla has been involved in a number of scandals over the past decade, with allegations relating to workplace safety, racial discrimination, sexual harassment, labour violations and unlawful practices to curb unionisation efforts.

A United Auto Workers picket line in Wayne, Michigan, 26 September 2023. Photograph: Matthew Hatcher/AFP/Getty Images

Corporations used to get away with such behavioiurs, but increasingly successful strikes and labour organising this year suggest that the power balance is shifting. 2023 has been a year of high-profile strikes and labour union victories in the US. Despite decades of supreme court rulings that make it harder to form unions, and conservative state governments enacting so-called right-to-work laws (an Orwellian euphemism for suppressing labour organising), there now seems to be real momentum, with support for unions at record highs. Fewer than 10% of US private sector workers are unionised, but 67% now support unions, up from only 48% in 2009.

The Hollywood actors’ strike organised by the Sag-Aftra union lasted 118 days, making it the longest strike in the guild’s history. It ended with significant victories including big increases in salaries, benefits and pensions, as well as a framework for AI guardrails for actors. More than 75,000 workers for the healthcare giant Kaiser Permanente also participated in a US-wide strike, resulting in pay rises of more than 21% for workers.

When United Auto Workers organised strikes at the “big three” car companies – General Motors, Ford and Stellantis – in Michigan this summer, three-quarters of Americans said they supported it. Joe Biden showed up, having called himself “the most pro-union president in American history”. Characteristic hyperbole perhaps, but Biden’s administration has accomplished quite a lot for labour unions in the past three years, especially compared to the dismal record of other recent presidents. (Donald Trump also showed up in Michigan, but gave a speech at a non-unionised car parts maker, which was equally characteristic of his signature working-class cosplay without policy substance.)

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The United Auto Workers strike resulted in big concessions from the carmakers, who agreed to 20-30% pay increases for workers. For Musk, there are reasons to worry that his business model could be challenged, as the fight in Sweden reverberates with the strengthening power of labour organisers across American unions. The average worker for the big three US carmakers now makes significantly more money, and has better benefits, than a Tesla worker, which could make it easier for UAW to organise workers at Tesla factories across the US as well.

In an interview, Susanna Gideonsson, who heads the Swedish trade union federation fighting Tesla, sounded remarkably confident. “This will end with the employees winning a collective bargaining agreement, one way or another,” she said. And if they don’t? “Then Tesla can leave the country.” If she is right, this could be a tremendous symbolic victory, which would strengthen the tailwinds for union movements on both sides of the Atlantic.

In facing off with its Swedish mechanics, Tesla seems to have underestimated the sheer force of the union movement behind them. In classic David v Goliath fashion, the mechanics took on the world’s richest man, but the momentum is now with them.

  • Martin Gelin writes for the Swedish newspaper Dagens Nyheter


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