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Elon Musk may have met his match in the German unions

A conflict with the unions could be a stumbling block for Musk in his mission to make 500,000 electric vehicles a year in his Berlin gigafactory.

By Miriam Partington in Berlin

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At 9:45am on November 5th, Elon Musk swooped into BER airport on his private jet – unannounced, in the middle of Germany’s national lockdown.

Three-quarters of an hour later, the Tesla CEO tweeted the reason for his surprise visit: “Recruiting ace engineers for Giga Berlin! Will interview in person tomorrow on site,” he wrote.

Within minutes, Musk’s Twitter erupted: thousands of hopeful engineers replied to the tweet, hoping to be in with a chance of meeting the Tesla boss in the flesh. “Hire me Elon, I’ll work hard for you brother!” read one of them. 

But while engineers are thrilled about the chance to work for a man who is something of a celebrity in Germany and a hero to many, the country’s powerful unions are wary: Musk is no friend of organised labour. 

In the United States, Tesla workers have filed serial complaints about low pay and poor working conditions. And Musk himself has repeatedly opposed employee efforts to unionize.

“We are in touch with our sister organisations at other Tesla facilities, so we are fully aware of personal allegations, as well as legal accusations and litigations against Tesla,” says Birgit Dietze, District Manager for IG Metall, Germany’s largest metal workers union, in Berlin-Brandenburg-Sachsen.

“We could take that as a hint as to what to expect of Tesla in Grünheide.” 

These tensions are significant as unions wield serious power in Germany. IG Metall alone has 2.4m members willing to shut down industrial operations in defence of overtime payment, fixed working hours, and a minimum holiday entitlement of 24 days a year.

US retailer Walmart left the German market after a string of failures thanks in part to its inability to get along with the unions. 

IG Metall rally. Credit: IG Metall

A conflict with the unions could be a stumbling block for Musk in his mission to turn the Grünheide factory – which will make 500,000 electric vehicles a year – into a central pillar of the company’s European strategy.

Musk has already collided with German unions before when Tesla acquired Grohmann Engineering in the small town of Prüm in 2017. Musk’s round-the-clock work ethic proved problematic for the German workers, and the wages he offered were initially up to 30 percent lower than the German average, according to a report by Handelsblatt. 

So will the unions put a spanner into Musk’s plans? Or will they learn to work together?

Tesla’s hiring spree

Tesla’s Gigafactory is taking shape at lightning speed in the municipality of Grunheide, just southeast of Berlin. The company says it will recruit 12,000 workers – from warehouse employees and engineers to printing technicians – and will begin production in Summer 2021.

Frankfurt Oder Employment is just one of many agencies assisting Tesla with recruitment. Jochem Freyer, the Head of FOE, told Der Tagespiegel that the plan is to recruit people mainly from Brandenburg and Berlin, who are unemployed or in the midst of changing jobs.

Freyer also revealed details about salaries – which are higher than the current median wage in Brandenburg. The lowest wage group at Tesla will be paid a salary of €2,700 euros gross per month, while employees with relevant vocational training will receive €3,500 per month. 

Fortunately for Musk, some of the world’s brightest engineers are already queuing up to work for him. This year, a Universum survey of 7,542 American engineering students revealed that Tesla was the most attractive company to work for after Musk’s rocket-building venture, SpaceX.

Part of Tesla’s widespread appeal is its move fast, break things approach, says Mark Kreuzer, an engineer and self-described car blogger based in Cologne. Kreuzer applied to be part of a specialised task force of engineers – the ‘25 Guns’ – at Giga Berlin, that will solve the toughest problems along the production line and will report directly to Musk.

“I’m not a Tesla fanboy, but I think Musk is really fascinating,” he told Sifted. ”His willingness to try out crazy ideas without the fear of failing is super appealing to me as an engineer.”

Kreuzer isn’t the only one to hold these views. Other candidates for Giga Berlin told Sifted that Tesla’s experimental spirit and fast-paced working environment are just some of many reasons why they would like to work for the automaker. 

“I would never usually consider applying to such a big company,” adds Kreuzer, who owns his own business and enjoys a pretty good work-life balance. “But, if Musk had said ‘Mark, be at the factory at 1pm, I would have got in the car and gone to Berlin straightaway.”

Elon Musk Tesla Germany
Elon Musk. Credit: NASAKennedy

Musk the union-buster

Tesla’s always-on work culture has become notorious in recent years. Musk himself claims to work 120 hours a week, and has been known to sleep under his desk in a sleeping bag when deadlines loom. 

“Tesla is built around this culture that Elon Musk has put in place, where workers are forced to do anything and everything to get cars off the assembly line on time,” says Steve Smith, Communications Director for the California Labour Federation.

Elon Musk is known for being “extremely anti-union,” adds Smith, and has even broken laws to prevent his workers at the Fremont Plant in California from unionising. This has had serious consequences for some workers – both in terms of their pay and benefits, but also in terms of their health and safety. 

In fact, Tesla employee Jose Moran revealed in a Medium post that long hours of physical labour once caused six of his eight team members at Fremont to take medical leave simultaneously. 

Tesla didn’t respond when Sifted reached out to them for a comment. This could be down to the fact that the company has, according to electric vehicles news site Elektrek, dissolved its PR department. Tesla is now the only automaker that doesn’t speak to the press. 

‘Workers’ rights are rights’

Neither Musk’s treatment of his employees, nor Tesla’s reluctance to engage with the media, seems to concern the German engineers rushing to get a job at Giga Berlin. 

Kreuzer says that issues with employment rights aren’t “Tesla specific” as every large company encounters them at some point. 

He’s not wrong. US retailer Walmart clashed with German unions in 2001, just five years after it entered the German market, for prohibiting the meeting of workers’ councils and paying substandard wages, among other things. The company later pulled out of Germany in 2006.

Unions have been central to keeping the automotive sector as stable and innovative as it is, says Dietze. 

“The strong organization of autoworkers in the IG Metall has allowed for collective agreements that define a high binding standard of working conditions for the whole industry.”

“These agreements ensure that manufacturers compete for the best quality, but not for the cheapest conditions of employment.”

The power IG Metall wields in Germany is not to be underestimated. In 2018, the union won the right to a 28-hour working week and 4.3% pay rise for industrial workers, after a series of 24-hour “warning strikes” – the first of their kind in 34 years. The strikes cost producers like Porsche, Daimler, BMW, and Airbus €200 million in lost production.  

With this in mind, it would be a mistake for Musk to think he can avoid complying with German labour standards. “Workers rights are rights. They are not up for discussion,” adds Dietze.

Unions stuck in the past?

It seems to Kreuzer that Tesla and unions have conflicting visions. Tesla wants to move fast and get things done – even if that means employees working additional hours – while unions are concerned with workers clocking out on time. 

Could it be that unions are an obstacle to innovation?

“I think Musk would probably see it that way,” says Kreuzer. “Unions were founded at a time when workers were really exploited at the start of industrialisation, and I think that kind of slavery is less common now.”

Smith sees it differently. “Innovation is not exploitation – and that’s something that CEOs like Elon Musk just don’t understand. Exploiting your workforce is, in no way, furthering the cause of progress – in fact, it takes us back in time 100 years before we even had labour laws.”

According to Musk, it’s the unions that are stuck in the past. During the dispute at Grohmann industries, he referred to IG Metall as being an organization with “outdated values” that simply doesn’t understand his mission for a sustainable future. 

Musk obviously hasn’t spent much time engaging in what we stand for,” says Dietze. “We share Tesla’s vision of more sustainable mobility and a decarbonized economy. There are no good jobs and no social justice on a dead planet.”

IG Metall wrote Tesla a letter earlier this year: welcoming the company and its investment in Brandenburg and offering them an opportunity for dialogue. So far, Tesla hasn’t responded.

Despite IG Metall’s hopes for a friendly relationship with Tesla, the automaker has made a decision to not join a union in Germany. There is, after all, no legal obligation for them to do so.

This will be a good thing, says Alex Voigt, author at CleanTechnica and Elektroauto-news and an expert on the German auto industry.

“It will allow Tesla to pay employees better than what unions regulate – which is exactly what they did [when they acquired] Grohmann,” he says. 

“Tesla is doing something exceptionally positive – especially for uneducated workers and the long-term unemployed. That is, indeed, a worthy story to write about.”

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John Campbell
John Campbell

Tesla in Germany sounds like a fantastic experiment where the best of American innovation meets the German worker’s paradise. It may end with a whimper of unbreachable principles and collapse as with Walmart. Or it might produce a vigorous synergy between the best of two worlds – one that could serve as a model for the west. Thanks for the article – I will definitely be following this experiment as it unfolds.

Hal
Hal

It would be cheaper to ship cars from Texas than to be saddled with the burden of German labor unions that won’t even work 30 hours a week.

Andy
Andy

Tesla is already shipping Model 3 SR+ from Giga Shanghai. Which means China is continuing to make strides in the economy yet Europe is busy having meetings about meetings.

John Subritzky
John Subritzky

I live in Germany,the Work life balance is the best I have encountered anywhere. I have family time and paid holiday,the education system is Paid for by the state,as is the medical system. People are happy to go to work here.
America and Elon could learn a lot from the social systems of Germany.

Matt
Matt

You could learn a few things about the impact Elon’s companies have on humanity.

Work life balance is great, but for something as important as extending the life of our planet and species – we need as many man hours as possible. There’s a reason why Tesla & SpaceX are the most sought after jobs in the world.

tom
tom

Most sought after in the world? You mean the USA only.

Tim
Tim

Most sought jobs, haha. Go and chat with some Porsche employee. They‘ll get a bonus salary each year depending on the company’s profit. Usually something between 12-15.000$

And no. That’s not the 13th salary aka Christmas payment. They’ll get that as well. Meaning during December/ January they receive payments of apprx 25-30K (12+13th salary + Bonus).

Every single employee.

Clark Mills
Clark Mills

While Elon is in america I don’t consider him an American… I guess that’s why I’m considering a Tesla (Toyota normally).

Robert Mitchell
Robert Mitchell

I agree with you on this. United States can learn a lot from Germany and other countries.

tom
tom

What exactly makes you think they don’t work 30 hours a week?

I am from Germany, btw. So please quit your bullshit.

Michael
Michael

Perhaps the article which states a 28 hour work week?

Jeremy
Jeremy

Which doesn’t exist. No idea where they got that.

Csöbörbölvödörbe
Csöbörbölvödörbe

Go Germany ❤️

Engineer
Engineer

As an automotive design engineer I can see this from both sides. Musk’s Stark-Tech like approach to challenges, and conventional business practices is instrumental to changing the world we all live in. History books are going to look at him as the most significant catalyst in our species sustainable power revolution. The UK had a huge automotive sector in the 70s/80s and it was destroyed by union greed, never to recover. On the flip side union power is the only way rank and file workers to have a voice over pay and conditions. Somewhere between the two is a balance… Read more »

Peter Saxby
Peter Saxby

Fair enough

I have more trouble relating to a billionaire wanting to underpayment skilled workers

SW Eng
SW Eng

I earned (in Europe) significantly more as a simple software engineer. His business “genius” so far seems to be to severely underpay employees, make them work much more than what’s healthy and sustainable, and avoid paying taxes. As most “wonder companies”. The end does not justify the means.

RU Ready
RU Ready

Eon Musk has become the 2nd richest man on earth in the past 11 months. I think that there is room to pay a competitive wage
as business is up for him.
I also wonder about what happened to the 8 hr workday? Even during WWII my parents worked 8 hrs and then another 4 hour job past
that if they wanted to. It seems as though working people are tolerated until automation takes over. Then We will see what the Elites really think of the working person!

Eric
Eric

Good point

Mark Elliott
Mark Elliott

The old line about the unions destroying the uk car industry needs a little balance. Sure the unions weren’t at their greatest in the 70s but there was also a massive lack of investment in innovation, and a prevalence in management for value extraction and cost cutting to deliver profits. The cars produced by the UK in the 70s were generally very poor design quality – hardly the fault of people on the production line.

Xicodude
Xicodude

Musk is pushing for Universal Basic Income instead of unionization. I believe the two should work together to make it happen.

danny thomas
danny thomas

Fred Bailey of London Ontario is a genius that works at Cameron Crane. He is an inventor and is the most intelligent man on earth that i know of and should be putting an application in. With Elon Musk. Look him up ! Google him! He can do anything that he attempts.

Frankie
Frankie

Car part or AI you can replace it or improve it but us ??? how can you put a price for so little or so big is priceless ??? good luck with your msg ? to see is to believe ??? ☮️??? see you soon YESTERDAY was the HISTORY today is the future tomorrow is a MYSTERY

mark A
mark A

It’s a bit early to be drinking so much don’t you think?

mark A
mark A

It’s a bit early to be drinking so much. Don’t you think?

Jeff Salisbury
Jeff Salisbury

Every day, there really is a full and total eclipse of the moon, right?

mark
mark

Jeff when your stream of consciousness has become so esoteric that only you know what you’re talking about. It’s time to try again.

Berniepragle
Berniepragle

There’s two of us that understand Jeff. In fact, he is my link with reality!

pongajim
pongajim

Want more money…figure out a way to be worth more…

Mark Johnson
Mark Johnson

Nice

Dumitrescu Radu - Cristian
Dumitrescu Radu - Cristian

“Let’s make America great again”=modern slavery> Eleron Must please work with your family 30 days on each position in the fkng factory and we talk later, ok ?!

Araeli Jasmin Morales
Araeli Jasmin Morales

Are you kidding me?!!! he’s running 3 corporations flying around the world negotiating with other countries and making sure that they adapt to the new ecosystem that our planet needs while he’s also helping us move on to a next source of life what the hell is your problem you expect to believe that he’s the one sitting down creating every single car for you

Mark Johnson
Mark Johnson

I hate union abuse. I have seen unions apply their power that supports irresponsibilty, lack of integrity and just a poor attitude to name a few things. Unions protecting the abuse if the employee is a good thing. But unions can never seem to stay away from abuse theirself. Which only supports things that are not mentally healthy for optimizing their own state of awareness. And truly says to hell with the teams health and well being.
Unions as a whole are not a good thing. They are equivalent unhealthy treatment of bad breath.

The End.

tom
tom

Lol. You must be American. The world isnbigger than the USA. Have a look outsife your country’s borders and how unions work elsewhere.

Curtis
Curtis

I can tell he’s never even been in one.

Yoandy soto
Yoandy soto

Let me tell you some person experiences from working in Europe’s many different countries union have good intentions but creates to many parasites that don work and only milk the system and is very difficult to get rid of them. Union ideology stops innovation and progress tell me something when was the last time Germany created something that had a world impact? That is what musk is bringing with him.