Sweden: Tesla strike a critical battle against anti-unionism

December 12, 2023
man faces a factory
Tesla is dragging out negotiations with little intent of entering into a collective agreement with its employees. Photo: ifmetall.se

Tesla mechanics and service workers in Sweden walked out on strike on October 27, after Tesla management refused to negotiate a collective agreement with their union.

The workers are members of Industrifacket Metall (IF Metall), a blue-collar trade union with more than 240,000 members. IF Metall claims it has enough money in its strike fund to financially support striking workers for more than 500 years.

The strike quickly spread across the country, as workers from other unions and industries took solidarity action.

Dockworkers placed a ban on the shipment of all Tesla deliveries into Sweden on November 7. Ten days later, cleaners announced they would refuse to clean Tesla showrooms and electrical workers placed a ban on servicing Tesla charging points.

Postal workers launched a work ban on deliveries of number plates to the company on November 20. Four days later, the strike took a further turn, when workers at Hydro Extrusions in Vetlanda refused to supply critical components for Tesla’s service operations.

Unlike in Australia, solidarity strikes and secondary boycotts are legal in Sweden, and it is this ability for workers to engage in cross-industry action that has given them greater power.

Sector-wide bargaining

Tesla has refused to sign on to a collective agreement and meetings between IF Metall and the company have not been fruitful. IF Metall’s Jesper Pettersson said in a media statement that Tesla dragged out negotiations with little intent of entering into a collective agreement with its employees.

“We have tried to negotiate with Tesla for the better part of five years, and we have tried to explain to them the benefits with the collective agreement,” said Pettersson. “But if they still refuse then we have the option to take action: and finally we ran out of patience.”

The Tesla dispute is important because collective agreements form the centrepiece of the “Swedish Model” of labour regulation. Sweden does not have a minimum wage and little statutory labour regulation. Much like in other Nordic countries, the state plays a very limited role in industrial relations and instead, it is largely left to unions and employer organisations to self-regulate employment relationships.

The vast majority of employment rights are contained in collective agreements that are bargained between unions and employer organisations.

Sweden is renowned for having some of the highest rates of union coverage in the world. According to OECD statistics, more than 65% of Swedes are members of a trade union.

Additionally, collective agreement coverage is exceptionally high. More than 89% of Swedish workers are employed in jobs that are covered by collective agreements.

Sweden has a two-tier collective bargaining model that involves bargaining at a sectoral and local level. Sectoral agreements are negotiated by unions and employer organisations to cover an entire industry and then applied to all enterprises that are members of the relevant employer association.

Since employer organisation membership sits at more than 88%, sectoral agreements are essentially extended to the overwhelming majority of workplaces. Employers that are not members of an employer association, such as Tesla, need to be persuaded and/or pressured by a union to enter into a substitute agreement that is identical to the sectoral standard.

Bargaining for sectoral agreements usually takes place in large bargaining rounds involving all unions and industries. Concluded collective agreements usually have a lifespan of three years.

By negotiating collective agreements on a sectoral basis, employees are guaranteed wages and conditions that are standard across an industry. Sectoral bargaining takes wages out of competition by setting a wage floor. This prevents the race-to-the-bottom that has become so prevalent in Anglo-American countries, whereby employers compete to undercut each other on pay and working conditions.

At an enterprise level, union delegates can negotiate company-specific collective agreements to cover individual workplace and enterprise needs. Sweden’s model, therefore, reflects a synthesis of the dual need to set industry wide wage floors and allocate enterprise-specific bargaining duties to firm-level players.

The model is underpinned by high union density, the freedom for unions to negotiate and to take industrial action where necessary, without excessive statutory restrictions that exist in other countries, such as Australia and the United States. Consequently, the vast majority of Swedish employers accept the collective bargaining model as the standard form of labour regulation.

Enter Tesla

Tesla refuses to sign on to a collective agreement at any level and has a history of ideological opposition to unionisation.

In the US, Tesla has fiercely resisted unionisation for years. It was reprimanded in the US Supreme Court in March for unlawfully dismissing a worker for union organising and unlawfully threatening to remove workers’ stock options if they attempt to unionise.

Tesla CEO Elon Musk publicly denounced the Swedish strike and said on November 29 that he disagrees with “the idea of unions”.

Tesla’s refusal to opt into the collective bargaining system is seen by Swedish society as an attempt by a US company to undermine its sector-wide bargaining model and stable employment conditions.

Swedish industrial relations expert German Bender, from progressive think tank Arena Idé, said: “It’s a very small conflict — maybe 120 or 130 employees. But it’s a huge employer, with potentially norm-setting consequences … I am not saying that if the unions lose, the next day the Swedish model ceases to exist; but it is important in principle, because if the unions were to allow Tesla to get away with this, other employers would start asking themselves, why do I have to sign a collective agreement?”

Boycott spreads to Scandinavia

The Tesla strike is beginning to take on a pan-European character.

Jan Villadsen, chair of Denmark’s 3F Transport Union, called for a ban on handling Tesla vehicles at Danish ports on December 5. Such solidarity actions demonstrate the power workers have when they take industrial action across international borders.

Villadsen said: “[T]he trade union movement is global in the fight to protect workers. With the sympathy strike, we are now stepping in to put further pressure on Tesla.

“Solidarity is the cornerstone of the trade union movement and extends across national borders. Therefore, we are now taking the tools we have and using them to ensure collective agreements and fair working conditions.”

Following Denmark’s lead, unions in Norway and Finland announced plans to block Tesla shipments. Norwegian transport union Fellesforbundet announced on December 6 that it would take any necessary action to block Tesla shipments to Sweden, starting from December 20.

Fellesforbundet leader Joern Eggum said in a media statement that “The right to demand a collective agreement is an obvious part of our working life and we can't accept that Tesla places itself on the outside”.

Finnish transport union AKT liitto announced on December 8 that its dockworker members will start blocking all Tesla vehicles and components destined for Sweden from December 20.

These examples of international industrial action demonstrate the enormous power working people have at their fingertips when they organise and coordinate across national borders.

Workers have the power to change the world. By organising across borders we can reach our potential and take down the empires of corporate billionaires like Elon Musk.

[Clive Tillman is an Australian Services Union delegate, lawyer and labour law PhD student at RMIT University.]

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