Tesla’s Battle With Sweden’s Unions Now Includes Pension Fund

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Weeks after mechanics working for Tesla in Sweden walked off their jobs in late October, members of other unions across the country and elsewhere in Scandinavia have joined the strike in sympathy by refusing to provide services to Tesla to pressure the automaker to sign a collective agreement with its Swedish workers.

The strike in Sweden, by mechanics represented by the trade union IF Metall, was the first labor action against Tesla, the U.S. maker of electric vehicles founded 20 years ago and run by Elon Musk. In the weeks since, the strike has spread beyond Sweden after dockworkers in Denmark said they would stop unloading Tesla vehicles at ports around the country.

  • A regional pension fund, PensionDanmark, has sold its shares in Tesla, citing the company’s “very categorical denial to reach collective agreements in any country.”

  • The transport workers’ union in Finland voted to join a boycott of all Tesla vehicles and components destined for Sweden beginning Dec. 20.

  • A Swedish court ruling denied Tesla’s bid to end a labor blockade of its mail delivery, including license plates, pending a final ruling.

Tesla does not make cars in Sweden, and the country is a relatively small market for the automaker. Not all of the mechanics at its seven service centers are taking part in the strike. But the labor action has drawn widening support from other unions including dockworkers, electrical and postal workers, and now from an institutional investor.

Unions say Tesla is flouting Sweden’s tradition of collective agreements. About 90 percent of Swedish workers are covered by these agreements, which apply to nonunion employees and set work conditions across industries. They have a long history in Nordic countries and are widely seen as crucial to maintaining social cohesion and a high standard of living.

The strikers and the unions taking up their cause “are fighting an incredibly important battle right now,” Jan Villadsen, chairman of the 3F Transport union representing the Danish dockworkers, said in a statement. “Even if you are one of the richest in the world, you can’t just make your own rules,” he said, referring to Mr. Musk.

But Tesla’s Model Y is a hugely popular sport utility vehicle in Sweden, topping the list of electric cars sold this year. Some industry officials in Sweden are becoming worried that a protracted labor battle could harm business at repair shops forced to stop servicing Tesla vehicles.

IF Metall wants Tesla to start talks about adopting a collective agreement. The pact would set the basis for wages and benefits for all, although only about 70 of Tesla’s 120 mechanics in Sweden belong to the union.

The union believes that most of its members at Tesla are staying home, but concedes that “some are regrettably at work despite the strike.”

At least 10 other unions have joined by refusing to clean Tesla’s facilities, service its battery chargers, or paint and repair its vehicles. All told, about 150 members of IF Metall and other unions are involved in the strike in some way, the union said.

Union leaders see the blockade against Tesla as one that defends the Swedish Model, a way of life that has defined the country’s economy for decades. At its heart is cooperation between employers and employees to ensure that both sides benefit equally from a company’s profit.

But organized labor is not so strong in emerging green industries, and union leaders are concerned that if those jobs remain nonunion, they will have lower wages and fewer benefits.

Tesla, which starting selling cars in Sweden in 2013, has not responded to repeated requests for comment. But Mr. Musk has more than once made clear how he feels about organized labor, most recently at the DealBook Summit in New York.

“I disagree with the idea of unions,” Mr. Musk said, adding that they create “a lords and peasants situation” within the work force. “I think unions naturally try to create negativity within a company,” he said.

Although it has not signed a collective agreement, Tesla insists that it follows Swedish labor laws, pays employees well and offers them stock options. None of its service centers have been forced to close because of the strike.

When postal workers stopped delivering mail, including license plates, to Tesla, the company filed lawsuits against the government agency that produces the plates and PostNord, the postal company the government uses to deliver them. . Tesla demanded that the postal company either deliver or surrender the plates it had.

So far, Tesla has not convinced the courts. In late November, a judge ruled that the agency must make the plates available to Tesla, but another court later overturned that ruling. In the other case, a judge said PostNord did not need to deliver license plates being held by the postal service’s workers. Both cases await a final ruling.

Solidarity among unions in Nordic countries is strong, and IF Metall has been in talks with neighboring labor groups to prevent the automaker from evading the Swedish dockworkers’ blockade by transporting cars across the border from neighboring countries.

The response has reflected how deeply rooted organized labor is in the region: Unions representing transport workers in Denmark, Finland and Norway have all agreed to stop unloading Tesla vehicles bound for Sweden that arrived at ports in their countries.

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In Denmark, support has spread from beyond organized labor to institutional investors. PensionDanmark, a pension fund with about 317 billion Danish kroner ($46 billion) under management, said that Tesla’s outright rejection of collective agreements led it to sell its stake, worth about $69 million.

Support has been split. Some view the strike as an important statement about their way of life, and others say the union has gone too far and is promoting an unwinnable, and to some unjust, fight.

The Model Y ranked as Sweden’s best-selling electric vehicle in November, reflecting continued demand despite the strike.

An official from an association that represents local car repair shops has also raised concerns that some of its members are being hit hard by the sympathy strikes, which prevent them from carrying out any repairs.

“We see that it is an unfortunate situation which, in the event of a protracted conflict, risks threatening Swedish jobs,” said Hanna Alsen, head of negotiations at the Motor Industry Employers’ Association.

Strikes are rare in Sweden. Often the threat of a walkout is enough for negotiations to begin. IF Metall said it had tried for years to bring Tesla to the negotiating table.

The union has said it is prepared for a protracted fight but would end the action if Tesla agreed to discuss a collective agreement.

At the same time, Tesla remains the only major U.S. automaker without union representation. The company has remained resistant to unions even in European countries with strong traditions of organized labor, including Germany, where Tesla opened a factory in 2022.

Esben Pedersen, who helped bring Tesla to Europe, said the automaker might have painted itself into a corner in Sweden, adding that the strike is about a larger issue than just wages and benefits.

“It’s about a cultural clash between two distinct systems: the Scandinavian labor market model, which emphasizes collective negotiation, and the Silicon Valley ethos of agility in pivoting, coupled with Elon’s focus on vertical integration,” he said. “Even if he offers compensation that exceeds requirements, the strike would likely continue until Tesla agrees to a collective bargaining agreement.”

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