News

Tesla Raises Pay for Workers in Germany

James L. Flint

• November 06, 2023

Tesla, the electric-vehicle manufacturer, has announced a 4% wage increase for its workers at the Berlin site, signaling a response to the pressures coming from local German politicians and the IG Metall union. Despite its resistance to unions in the past, the move shows that Tesla cannot completely overlook union demands. The Berlin plant, which currently employs around 11,000 workers and produces approximately 5,000 cars per week, has been a subject of scrutiny regarding its working conditions.

Wage Increase and Comparisons

While the promised wage increase is a significant development for Tesla workers in Germany, it falls short when compared to the recent raises secured by the United Auto Workers union for employees at Ford Motor, General Motors, and Stellantis during their recent strike. These agreements with Detroit car manufacturers anticipate wage increases of about 25% over the course of the contract, awaiting approval from UAW members. This difference highlights the ongoing struggle between management and labor in the automotive industry.

Impact on Tesla

Tesla's resistance to union drives in both the U.S. and Europe does not guarantee that the company will remain unaffected by growing wage pressures. Such pressures could potentially impact Tesla's profit margins. President of the UAW, Shawn Fain, has expressed intentions to target U.S. sites without union representation in the future.

Toyota's Example

In a similar vein, Toyota Motor of Japan has recently agreed to grant its U.S. auto-factory workers a 9% pay raise starting next year, even though its factories remain non-unionized. This example highlights how car manufacturers can use promises of future vehicle production at specific sites as incentives during negotiations with workers.

The Future of Tesla in Germany

During his visit to the Berlin factory, Tesla CEO Elon Musk informed workers that the assembly plant would be responsible for producing the company's next-generation vehicle, projected to be priced around $25,000. This announcement serves as an additional incentive to bolster morale and job security among Tesla's German workforce.