Possible Strike Threatens Tesla Model 3 Production

Tesla Model 3

APR 17 2017 BY ERIC LOVEDAY 55

Tesla Model 3 Spy Photo

Tesla’s scheduled start of production in July for the Model 3 could be in jeopardy.

And it’s largely beyond Tesla’s control.

Recently, Tesla acquired Grohman Engineering and then formed Tesla Advanced Automation Germany out of the deal. The plan was to  secure an advanced engineering group in order to streamline/speed up the development and production process for the Model 3.

Some Details On Grohman Pre Acquisition

It sounded like an excellent idea, but now there’s trouble brewing.

As Germany’s Welt Am Sonntag reports, a worker strike at Tesla acquired Grohman is a real possibility. The strike could begin as early as this week.

Possible Strike Threatens Model 3 Production

Reasons for the strike include:

The 660 Tesla Grohmann employees are paid up to 30% below union rate

Tesla cancelled all non-Tesla order at Grohman, which is fueling fears over job security

Grohman’s founder has left the company within reason

Tesla has responded by offering to increase employee pay by some 150 euro per month, but this doesn’t provide wage parity with union rate. The union is asking for a wage increase of closer to 400 euro per month. Tesla is willing to increase compensation further through a TSLA stock program, but this too is being met with criticism from employees.

IG Metall is presenting the union. IG Metall rep Patrick Georg stated:

“We received an unsatisfactory response from the company. We’re going to check next week whether strikes are possible.”

Tesla issued this statement:

“We want to grow significantly in Prüm and understand that we have to pay competitive wages in order to achieve that. Everyone at Tesla Grohmann Automation is fair and competitive above the branch level.”

Any strike at this point, even one lasting just a few days, could seriously jeopardize the July start-of-production for the Model 3.

Watch this space for updates on this developing story.

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55 Comments on "Possible Strike Threatens Tesla Model 3 Production"

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Someone out there

Yep this is what unions do. They suffocate the companies until they are forced to leave or go bankrupt. Then they complain about jobs leaving the country.

FrankfurterBub

Sorry, I’m not a huge fan of unions myself – but an US union has nothing to do with a German union. Our unions are more or less considered fair partners of the employers, a mitigating factor.

NOPE

If you have never worked in a non-union company where the company took huge advantage of the employees, then you have no leg to stand on here. Unions were formed to protect workers from abusive companies. Unions do not exist to screw companies, though some would like to think that.

One of the functions of a union is to ensure that employees receive fair compensation for the work they perform. Companies don’t like that. Companies want the most work out of employees for the least amount of pay.

It’s company greed that is the problem, not unions. Companies need lots and lots of profit so they can pay some a-hole in a cushy office on the top floor millions of dollars a year. Get real folks.

James

You oversimplify.

Yes, this was the reason labor unions were formed.
I have worked for non union houses that take advantage of their workers. This taught me that small labor unions and some mid-sized ones do lots of good.

Problem is, unions got too large – corruption and greed
takes over. Power structures and loyalty to the
union takes on mob family guise. Members pay dues to be
literally enslaved by their giant union and companies
such as large auto and aircraft houses begin to
die as a result of too strong unions causing
their products to lose competitive edge due to
soaring let’s and declining quality.

Look no further than the failed airplane companies
like McDonnel Douglas, or the bankrupted GM and
Chrysler.

@someoneoutthere….

Hahahaha! Precisely, that’s why German industry is in the dumps. Because the unions, and workers’ rights, are so strong there.

Oh wait. It is actually US manufacturing that’s struggling.
The US, where the unionized workforce is <10%, where in half the states you can hardly even form a union anymore, and in the other half the hi-tech's "workers here today, fired tomorrow at will" mentality generates paranoia, anxiety, instability and no workplace loyalty.

Meanwhile, US per capita GDP is about 20% higher than Germany. Fact is, Unions make things worse, not better. If you ever owned anything and had someone tell you as if they own it when they don’t, you’d understand. But if you’re a thief/robber, unions make lives better.

Kieran Mullen

We are in Oregon which is a at will state. There are also IT unions here as well stealing parts of our paychecks even when they fail to stand up for workers and side with management. Unions need to go.

Mint

Union members have a shared interest in the survival and growth of the company they work for. They can’t find replacement jobs easily, especially those with good benefits.

Company’s don’t care if they lose a couple employees due to low wages, because they can find replacements.

So it goes without saying that without unions, the power balance is absurdly in favor of employers. But once you realize the above points, it’s apparent that even with unions, employers still have more leverage, and employers with negotiating skills will almost always come out on top.

The world’s economy is dependent on consumer consumption more than ever due to the increasing income gap. Give a rich man $1000, and he spends a few percent of it, and of what he saves, the bank can no longer lend all of it back out safely. Give a poor man $1000, and he spends almost all of it. Consumption is at the root of every company’s success.

Anything that pushes wages down for the working class, such as less unionization, will hurt the overall economy.

What do you think the bank will do with the money that they can’t lend out? Put it under mattress? You have no idea how economy works.

Fact is, practically all savings (rich and poor) are invested in one form or another that create jobs. Otherwise, banks wouldn’t be able to survive since money depreciate in value. Investment result in jobs.

Poor people spend most of their money, but they’re mostly buying stuff made in China. Destroy the savings of the rich to give to the poor, you pretty much give money to China instead of jobs in US.

Alaa

So what if Tesla is delayed? Not a big deal.

Mister G

Wait a minute, I want a quality product from happy workers not crap from unhappy workers, and I’m willing to pay more for my model 3.

Send Trump over there 😉

Mister G

Yes president tweet will send them to work in unregulated coal mines lol

Tweet forthcoming, Donny and Elon are Buddies.

Anti-Lord Kelvin

I think sending Kim (North Korean “great leader”) would be better for the case…:) It would be resolve in a few minutes…

Mister G

Bite the bullet and pay them…cut wages in a few years. Model 3 has to be on time.

Mark

Or just bite the bullet and pay them. Strikes are bad for employees but worse for employers.

Or bite the bullet and shut down that location to move elsewhere. Being extorted by thugs is no way to do business.

Some Guy

Quite funny. Until the aquisition by Tesla, the workers were happy with equal or even less pay than what they now say is totally unfair. The Grohmann site is in the middle of nowhere, where cost of living is very low, compared to other areas in Germany.
And regarding wages cutting: Almost impossible in Germany unless the company is about to go belly up otherwise (and even then not guranteed to get through).

Steve

Tesla cancelled their backlog of other customers so they could focus exclusively on the Tesla plant alone. This is disruptive to the ongoing business of Grohman, it will permanently drive away former customers. It also puts these former customers in a difficult position, they also need these machines to meet their deadlines.
These pieces of custom automation are not like a widget sitting on the shelf, each one is typically custom-designed for the product they will produce. A strike at this point could delay Model 3 production longer than the strike lasts. Significant labor is required even after they are built and delivered to the US. Installation is not something you leave up to just anyone, typically the Grohman team will do that. And startup and commissioning will take Grohman engineers a few weeks at least. Again, this isn’t something you subcontract out because you have a labor dispute.

pjwood1

These people don’t sweep floors. You’d think skill sets that make the machine, that makes the machine, would hardly need a union? On the other hand, I’ve watched as ACA empowered health care providers have gotten the upper against tradesmen, known as “Doctors”.

Hope it works out.

pjwood1

..upper hand

Warren

Yup. And those guys (Until recently they were mostly guys) had a very strong trade union (AMA). Capital eventually owns all workers.

Warren

This was happening long before the ACA started.

Warren

ACA…formerly known as Romneycare, or welfare for insurance/pharma industry.

Warren

Damned workers. Always screwing things up for us consumers. Soon we will replace you all with robots. 🙂

I know, right? I can’t wait for ALL manufacturing to be done by robots. Humans have better things to do (like walking the dog).

Warren

Hey. Why don’t you PM me your credit card information? You seem like a pretty trusting guy. You will be walking their dogs, if you are lucky. If not, you will be their dog’s food.

Kdawg

You mean to tell me, all of the equipment to build the Model 3 isn’t complete, installed, and going through testing yet?

MaartenV-nl

Only the first production line for ~100k-150k cars is nearly ready.
Lines 2 to 6 are next to be build by Grohmann.

Anti-Lord Kelvin

This! So, the the July debut shouldn’t be at risk. Now, the improvement to the “machine building the machine” mark 1.0 in 2018, and then,the ramping to 10.000 cars per week production rate could be at risk for 2018.

¯\_(ツ)_/¯ sven

Shhhhhhh, don’t tell anyone.

LOL!

Taser54

Blaming the suppliers, a Tesla tradition since 2015.

(⌐■_■) Trollnonymous

Next they’ll blame mother nature with storms, hurricanes, floods, volcano eruptions…………..because THAT NEVER HAPPENS!.

Clearly you have never worked in manufacturing.

Taser54

It’s Tesla’s timelines that are to blame. Clearly, you can see that.

(⌐■_■) Trollnonymous

So other companies must have “Timelines” that are impervious to anything thrown at it whether man or nature inspired????

lol

Taser54

They don’t eliminate quality control phases like tesla nor do they push beta vehicles on customers to meet an over aggressive deadline.

Pushmi-Pullyu

Well, I did roll my eyes a bit when Tesla blamed “winter storms” for falling short of deliveries one quarter. Really, winter storms happened during winter? Of course, Tesla never could have anticipated that happening! 🙄

andy

An every car company’s tradition, unfortunately. Especially German OEMs are notorious for squeezing out suppliers.

HVACman

My first thought, too. Production managers usually do not use Just-in-time scheduling for their production machinery.But then, this is Tesla. Nothing is ever Business-As-Usual with them.

HVACman

My first thought, too. Production managers usually do not use Just-in-time scheduling for their production machinery. But this is Tesla. Nothing is ever Business-As-Usual with them.

u_serious?

So before the aquisition all was fine. After the aquisition and simplified processes by no longer having many diffirent products for different customers it’s now an issue?

Clearly unions all over are the same leaches.

orinoco

The union situation in Germany is very special. Union rights have been cut down by Adenauer to negotiations and strike about wages with employers. No more political power of the German unions.

And strike is not possible when there is a valid labour contract. “Friedenspflicht” (indutrial peace) is part of that contract. Strike is only possible after fruitless negotiations for a new labour contract.

So this story only seems half the truth, neglecting all these legal aspects.

Pushmi-Pullyu

“So this story only seems half the truth, neglecting all these legal aspects.”

Indeed. I think it’s rather premature to comment on the issue, as obviously this one article doesn’t cover the situation in detail.

It may not be true that every story has two sides, but it seems likely this one does. Until more info comes out about it, I personally will withhold judgment over who is, or isn’t, in the wrong here.

Regardless of whatever is at the bottom of this dispute, I hope it can be worked out amicably so that Model 3 production isn’t delayed.

Murrysville EV

Hmmm. WWGMD?

Spider-Dan

It is always perplexing to come to an EV-focused site, full of commenters who are generally concerned about the environment – and therefore almost necessarily politically liberal, due to the right’s open hostility to climate change science – and then watch them instantly turn into laissez-faire corporatists the moment labor presents even the smallest obstacle to the success of Mighty Elon.

I wonder if we’d be hearing the same strongly pro-management & anti-labor sentiments if this were a potential strike at a Toyota or GM plant? Or is it only Tesla whose motives are pure and whose workers should quietly work in silence, while paying their exorbitant Bay Area housing costs with… stock options?

Warren

You have confused neoliberals who with actual liberals.

Spider-Dan

And which camp are you saying is which?

I’m not sure if “neoliberals” are supposed to be the corporatist union-bashers, or the anti-Tesla establishment shills.

Warren

You have your neolibs, and your neocons. One backs silicon valley, and one backs fossil interests. Neither give a fig for workers.

Pushmi-Pullyu
“…watch them instantly turn into laissez-faire corporatists the moment labor presents even the smallest obstacle to the success of Mighty Elon.” It is, indeed, rather shocking to see nearly all the posts here instantly take a hard line anti-labor position, when most of us Americans have little knowledge of how much or how little political power non-union labor in Germany has. We can certainly point to the UAW in the U.S. as being one of the worst examples of union excesses, killing off vast numbers of their own members’ jobs and shutting down large numbers of American factories, and one of hte principle reasons for that was the union leaders started paying more attention to their own perks and their own political power than trying to protect their own union members’ jobs. But is there any reason to think this attempt at collective bargaining by Grohman Engineering workers is anything like the UAW’s self-defeating strongarm tactics? If I read this article right, the GE workers aren’t even unionized. Personally, I’m all in favor of collective bargaining by workers at individual businesses, and I’m also in favor of small local unions. Perhaps we should be listening to what these workers have… Read more »
G2

+1

Dütschmän

Thank God readers of insideevs can´t change legislation in germany. Our system (with unions, healthcare and wellfare) is superior. U take care of ur own country.

mm

Yes, union membership at 10% of the American workforce is cause of all our problems. How is that so easy for so many to believe?

James

Unions I any many others suffer under every week are the
Teachers unions.

Any parent here who has or have had children who attend
public schools know that teachers unions have gotten out of control.

Each year they fight for and win more days off, higher pay
and more protections. Each year our kids attend less
days of school and our nation sinks lower on twst scores
compared to all other developed nations.

More and more unfit and incapable teachers remain on the job and on the payroll.

It’s sad and pathetic. They have us all in a stranglehold.

Hmmm… ~*sigh*~ Whenever something of this sort happens, I wonder, “Are these demands that the union had any hope of seeing fulfilled by the prior ownership? Are they reasonable requests, or opportunistic threats?” and, “Can they be replaced?” I was under the impression that union members in Germany were already very well paid. If these guys weren’t being paid properly, why hadn’t they already gone on strike? Luckily, it seems that @Pushmi-Pullyu has been working toward answering those questions! Yay! OK, so… 1) If this was a non-union workplace, the employees had next-to-no hope of getting anything at all out of the prior ownership. 2) They are reasonable requests based upon the work done, though perhaps not based upon the cost of living in the area where the company is sited. The workers may well have been taken advantage of prior to the arrival of Tesla and are seeking relief now, because of the change in management. What better opportunity could there possibly be? 3) To replace the workforce, Tesla might as well just pull up stakes and buy another company outright, or go start yet another division from scratch. I must say that it is rather strange that one… Read more »