Tesla Strives to Avoid German Strike and Maintain Model 3 Production Date

by Matt Posky

Published: April 20th, 2017

tesla strives to avoid german strike and maintain model 3 production date

It’s no secret that the success of Tesla’s forthcoming Model 3 will dictate its position as a mainstream automaker for the foreseeable future. Tesla’s current status as the most valuable carmaker in the United States is riding, almost entirely, on the problem-free assembly of its “affordable” EV this summer. So, when one of its German suppliers threatened to go on strike earlier this month, you can imagine the series of panic attacks CEO Elon Musk probably suffered.

Last week, the company’s recently acquired industrial robotics unit Grohmann began labor negotiations over insufficient wages and Tesla’s decision to suspend all contracts that didn’t pertain specifically to the Model 3. And, to ensure things went his way, Musk has become directly involved in the process.

Grohmann Engineering — now called Tesla Grohmann Advanced Automation Germany — is responsible for the robotic assembly components of two production lines for the Model 3’s inverter, which are scheduled to ship out in the coming weeks. The hardware is essential for the vehicle’s construction and, without them, the Model 3 could easily fall behind schedule.

Prior to Tesla’s acquisition of Grohmann Engineering, the company hadn’t begun negotiations with IG Metall, Germany’s most imposing workers’ union. Afterward, however, the company quickly pushed for the requisite number of members for collective bargaining.

Electrek states that employees have expressed concerns over diminished job stability after losing important clients like BMW, Bosch, and Daimler. Meanwhile, IG Metall took advantage of the time-sensitive deliveries of the Model 3 lines as a potential bargaining tool to accelerate a favorable labor agreement with Tesla.

Unsatisfied with the early offers, Elon Musk held a Q&A with Grohmann employees to hear their concerns and issued a letter with an updated offer this week. The current offer includes a 150 euro per month wage increase, with each employee receiving a one-time bonus of 1,000 euros and 10,000 euros worth of Tesla shares conferred over four years.

In the address, Musk said that he didn’t believe IG Metall shared “Tesla’s mission,” echoing his previous stance against the UAW’s efforts to unionize its Fremont, California factory. “I would like to assure everyone at Tesla Grohmann that we will not reduce our workforce or make redundancies for the foreseeable future, and absolutely not for the next five years,” Musk wrote. “Even after these five years, we expect further growth at Tesla Grohmann and no staff reduction.”

While there is still the potential of a German strike, the proposal appears to have been well received. Tesla is claiming that, even if there is a strike, it will make use of its American workforce in Deutschland to finalize preparations to deliver the previously completed inverter production lines.

[Image: Tesla Motors]

#AutomotiveIndustry #ElonMusk #Germany #IGMetall #Production #TeslaMotors #Uaw #UnionNews #Unions

Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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3 of 6 comments

Indi500fan on Apr 20, 2017

I think Musk is learning that his incredibly high stock market valuation and proclamations of ginormous business success are a great talking point for unions who promise to help distribute some of that wealth to the proletariat.

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- SCE to AUX on Apr 20, 2017
  
  Yes, this same story played out once GM became profitable post-bankruptcy. Everybody wants their cut.
  
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ToddAtlasF1 on Apr 21, 2017

This could be as big of a triumph for Musk as their formula one team was for Toyota.

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