Interview with Union Leader Disquiet Brews at Tesla Germany Over Wage Discrepancies
Tesla CEO Elon Musk at the company's "gigafactory" in Grünheide, Germany, near Berlin
Foto:Odd Andersen / AFP
Birgit Dietze, 49, is the district head of the IG Metall union in the states of Berlin, Brandenburg and Saxony. In an interview, she explains why Tesla’s Germany operations have been affected by the shortage of skilled workers and higher salaries at the company's plant in Grünheide near Berlin. She says that discord is growing among the workforce.
The article you are reading originally appeared in German in issue 25/2022 (June 17th, 2022) of DER SPIEGEL.
DER SPIEGEL: Tesla CEO Elon Musk recently announced that he plans to cut 10 percent of his company’s workforce. Is the dream of 12,000 employees at the Tesla plant in Grünheide over before it has even begun?
Dietze: I don’t think so, and I also haven’t heard that it will affect Grünheide.
DER SPIEGEL: What makes you so sure?
Dietze: Several expansion stages are planned. The current plant will eventually employ 12,000 people and produce 500,000 vehicles annually for the European market. And there is still room for two more factories of this size to be built on the property. Then we would have 40,000 workers in Grünheide and an output of 2 million vehicles. But you’ll have to ask Elon Musk if these further steps are still planned. What we continue to expect that the first phase of expansion will be completed.
DER SPIEGEL: How many people are currently working in Grünheide?
Dietze: It is difficult to say, exactly, but around 4,500 to 5,000. There has been a massive increase in jobs since production began. But getting to 12,000 is still a ways away, and Tesla is looking in a region where there is already a shortage of skilled workers. Tesla is also feeling the effects of that.
DER SPIEGEL: What does that mean in concrete terms?
Dietze: We’re not Tesla’s human resources department, but there are milestones attached to ramping up production. And we are increasingly getting feedback from the workforce that the recruitment of skilled workers is falling short of the targets set. This increases the pressure on the existing workforce on and the mood.
DER SPIEGEL: In what way?
Dietze: This is something we know from other companies. When it gets harder to find people, they make adjustments to salaries or working conditions when recruiting. So, new hires are paid better than employees who have been there longer – and that’s what’s happening at Tesla right now. It's not a triviality when others suddenly earn more than you for the same work and qualifications. And then Elon Musk sends out emails in which he rails against people working from home and abruptly announces job cuts. This hasn’t gone down well with the workers on the assembly lines, nor with the engineers or managers. We are hearing more and more often about people leaving Tesla and going back to their old employers.
DER SPIEGEL: At the same time, though, Tesla is considered an employer with an attractive image.
Dietze: The company is certainly a special employer, and many started there with a sense of euphoria. Tesla is seen as being more informal and more innovative, with more flexible structures and processes than traditional companies. The second draw is that Tesla stands for financial power and has the image of doing something to save the climate. But there is also a third point that is important for employees: How fair is my company? Will I be paid the same as others for the same work? And what will my employer require of me? How much will be demanded of me? It’s about what you give and what you get back, and the gnashing of teeth at Tesla is getting a little louder right now.
DER SPIEGEL: Has management started talks with the works council (employee-elected representatives) about this?
Dietze: There are discussions on various points, but this is the sole responsibility of the elected works council and concerns the employees’ expectations of their representatives. We respect that.
DER SPIEGEL: Instead of preventing a works council, Musk’s strategy was to initiate the election of a works council in Grünheide. Did he get the docile works council he was looking for?
Dietze: Not from our point of view. It is composed of representatives from different lists. It now has to find a way of working together. The question of differing wages will be a real challenge. And add to that the wage increases from our upcoming round of collective bargaining, which includes the automotive industry. There is so much pressure that Musk will have no choice but to raise salaries substantially soon.
DER SPIEGEL: In 2016, Tesla acquired the mechanical engineering company Grohmann in Germany’s Eifel region, and since then, the IG Metall union has been trying in vain to put a collective bargaining agreement in place there. Instead, there is an agreement with the works council at the collective bargaining level. How is that going to be any different in Grünheide?
Dietze: First of all, it’s the workforce that decides whether it wants a collective bargaining agreement. What we want or do not want doesn’t matter for the time being.
DER SPIEGEL: A few years ago, IG Metall would have raised its banner outside the factory gates at such a symbolic company and loudly demanded a collective agreement, and immediately.
Dietze: That may be, but it wouldn’t lead anywhere here. We want to work with employees. We know how to fight for and write up a collective bargaining agreement. But whether a collective bargaining movement forms and then culminates in a dispute is entirely in the hands of the workforce. There is a works council at Tesla, we are noticing the beginnings of social discord, and a movement is starting in the pay area because of the unequal wages, and this is increasingly being addressed at the works council. We also expect Musk to give the works council an agreement on wage increases, if only as a signal: No one needs a union here. But in the end, that’s nothing but window dressing.
DER SPIEGEL: Why? Because then there would be an agreement rather than a collective bargaining agreement.
Dietze: It makes a big difference. In the case of a works agreement, the works council signs what the employer materially stipulates, because it has no means of enforcing its own demands. In collective bargaining, including for an in-house collective agreement, there is parity – collective bargaining autonomy and the right to strike apply. That is a completely different balance of power. Without a collective bargaining agreement, the Tesla workforce will always fall short of the pay levels of other automotive companies.
