Tesla Gives Some Model 3 Workers Increased Wages, Job Security

Tesla Model 3 Production

OCT 20 2017 BY STEVEN LOVEDAY 39

Tesla Model 3

Tesla Acquired Grohmann Engineering and formed Tesla Grohmann Automation, in part to help with the Model 3 production ramp

Tesla has officially agreed to a deal with workers at Tesla Grohmann Automation.

As we previously reported, Tesla acquired Germany-based Grohmann Engineering in order to up its automation game and help with the Model 3 production ramp. Not long after the buyout, there were issues between Tesla, Grohmann founder Klaus Grohmann, and the company’s existing clients, which included BMW, VW, and Daimler. Since then, Klaus has retired (or been forced out), and Tesla has dropped all of the company’s prior contracts. Needless to say, the situation has grown quite messy.

Tesla Model 3

Tesla Model 3

Upon Klaus’ sudden retirement, workers were concerned about their future with the newly acquired company. Germany’s largest worker union, IG Metall got involved and threatened a strike.

Tesla immediately offered incentive packages to workers, in an attempt to curtail any major disputes that could have jeopardized the Model 3 launch and production. The initial offerings included stock options, one-time bonuses, and guaranteed employment for the next five years.

Now, some time has passed since the initial issues, and Tesla has taken the process a step further. The automaker has set up a new salary structure, which points to a 30 percent net compensation increase overall beginning this month. Workers will see an additional 150 euros in their monthly paycheck, as well as a bonus of 1,000 euros, and the equivalent of 10,000 euros in new stock options. The workers also have peace of mind to know that their jobs are secure until 2022. According to WELT (German publication), Tesla Grohmann’s Uwe Herzig said of the deal:

“We have developed our own remuneration structure in very pragmatic discussion.”

Source: Teslarati

Categories: Tesla

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39 Comments on "Tesla Gives Some Model 3 Workers Increased Wages, Job Security"

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500 Euros per MONTH? More like per week.

The German as well as the above article state 150 Euro/month.

30% increase means a 500 Euro base.

Wow, looks like this whole “union” thing seems to work out for the employees!

Not in America, though. Only our German betters are worthy of such lavish benefits. We dumb, lazy Americans aren’t responsible enough to unionize.

If you look at the original article here:https://www.welt.de/wirtschaft/article169760888/Tesla-gibt-deutschen-Mitarbeitern-deutliche-Gehaltserhoehung.html,
you will find, that they were paid 30% under tariff prior to the TESLA-aquisition and these aquisitions are alway a good opportunity for unions to step up their game. With the lates round of remuneration increases all these employees are merely on par with the Germany-wide tariffs.

What people, who are no german engineers might not know is, most engineers are paid under tariff, as these are extremely high with all benefits included. Only big companies like Bosch, Siemens, BMW, where unions are strong… are able to pay these, no medium sized family owned companies. 30℅ under tariff is more like standard payment.

The article states employees and not just engineers. I am an engineer from Germany and have worked there for quite some time. I have never been in a Union and have never been underpaid by 30% ever and none of my engineer friends either. The current job climate in Germany is so desperate for engineers, companies pay engineering students during their studies if they sign a contract to work for them a couple of years after they finished their studies.

Aren’t Tesla employees also underpaid relative to the rest of the (largely unionized) auto industry in the USA?

I mean, excluding stock options. You can’t exactly pay for your kid’s braces with stock options that don’t vest for years.

I don’t think it’s really appropriate to compare wages at a single auto assembly plant to wages nationwide. Wages vary widely from State to State, and so does the cost of living. To give an example: A cousin of mine once moved from Los Angeles (California) to here in the Kansas City area. She looked for a job as a computer analyst, her then-current career. She was told by career advisors that she should only expect about half the salary she was paid in California, because both wages and the cost of living were that much lower here. (However, surprisingly, she wound up with a job at about the same pay she had been getting.) I don’t know if the salaries among the auto assembly workers at the Fremont assembly plant are higher or lower than the national average, nor do I think it matters much. What does matter is that the cost of living in Fremont is pretty high, as is the case with most if not all urban and suburban areas of the southern 2/3 of California. It’s said by many that the salary of Fremont auto assembly workers is too low for the cost of living there;… Read more »

They should join Grohmann’s union. Create a US branch. And I’m not joking. They should just make it happen. German Unions are just so much better than UAW.

There is no reason for pure EV company workers to tie themselves to the old sinking ICE car company boat by joining the old US “Big 3” ICE car UAW union.

It would be like Ford workers joining the Buggy Whip Union just to be drug down with the buggy whip industry.

Well, if the braces are due right away and that is a new employee, then yes, the Options will not help.

OTOH, if the person started 5 years ago, then that employee’s options are probably buying at $2-10 for today’s stock. And considering that they likely have more than a 1000 shares, I think that selling 1-2 shares per kid will pay for those braces.

Yea Hurry Up Unionize & Put The Company OUT OF BUSINESS Before they have a chance to get off the ground. The workers will gain so much from that , BY SHUTTING THEM DOWN and they all lose their Jobs …This Company needs some breaks so that they can get going.. They Don’t need Speed Bumps in their way to slow or even bring them to a HALT! at this early Stage of conception….GIVE THEM A CHANCE! and you’ll give YOURSELVES a chance Holding on to your Jobs!! There is a Time & a Place for all things ! This is NOT THE TIME !!

And yet Tesla has chosen to reward the lazy unionists in Germany. Meanwhile, in America, hundreds of non-union employees are simultaneously, ahem, “fired for poor performance.”

We can debate all we want to , and we are not going to solve This companies Work force Issues. All I am saying to the workers is, give the cement a chance to solidify before walking all over it and ruining the foundation,Let It Solidify 1st, Tesla is trying to build a company that way all involved can have a livelihood with Jobs…Once Tesla forms a Good & SOLID Foundation , Go after them for more money ..At this stage Tesla is vunerable , Don’t go trying to shut them down at the risk of losing your own job at this early stage of the game .Give Tesla a Chance to get Established ,For the Good Of all Involved.

Tesla bought a well functioning company. It’s not a startup in any way.

As such Tesla needs to pay what the market requires to keep the good company they bought in good shape.

They are selling their expertise. Not working for a cause on voluntarily basis.

Vs. US non-union employees subject to Tesla’s recent mass firing with one example being a worker there for four years who gets fired for missing two days in last couple months…which most think was bogus and a cover for firing hundreds of workers Tesla suspected of voting for unionization.

German union protected the workers from corporate financial schemes while in US, close to 10% of Tesla’s workforce fired for trying to unionize.

Maybe the headline should read:
Firings in the U.S. pay for pay raises in the GDR.

Why don’t you keep politics out of this.

Exactly, Or at least have the courtesy to get the facts right. There is no GDR any more. Has not been since 1990. The FRG is the one that was left. Also, the Tesla Grohmann site is about as far away from former GDR territory as geographically possible without leaving the country.

As for the raise: As the cost of living in that rural area is way below average, the wages are usually lower than average, too, but allow a decent way of living (even factory workers often own houses, and not the uninsulated 2×4 plywood sheds that qualify as a house in the US). With that 30% raise, the Tesla Grohmann workers are the new “kings” in town, as they make way more than their similar qualified neighbors.

Again, looks like union membership is paying off for Grohmann workers.

Yea Off , Until they put themselves & the Company OUT OF BUSINESS!

Unions never destroy businesses unless they are on strike, and it goes long enough.
What destroys businesses is BAD MANAGEMENT that does not know how to negotiate and does not care about long-term issues.

Guess you haven’t lived very long to see the fall of the airlines where baggage handlers were making in today’s money over six figures or maybe you haven’t paid attention to detroit and the car companies that were all union and ended up in bankruptcy because janitors were making $70k. Unions have put a ton of companies out of business through we demand more than the market will bear or we will strike in either case the company goes out of business.

“…the uninsulated 2×4 plywood sheds that qualify as a house in the US”

I don’t know anyone who lives in a shack like that. While I suppose it’s possible some hillbillies live in such a hovel, I’m fairly sure none of them are working at the Fremont auto assembly plant!

Presumably you don’t live in the USA, or you wouldn’t spout such nonsense.

P.S. — The standard size for a sheet of plywood is 4 x 8. Certainly you can get quarter sheets, but I can’t imagine why anyone would build a house using them, unless it’s because quarter sheets can be transported in a vehicle smaller than a pickup.

His “nonsense” refers to 2” x 4” framing which IS how most U.S. houses were/are built. As to the plywood sheathing, he’s wrong, it’s usually chipboard (even worse).

Do some reading about Passivhaus and you’ll start to understand his criticism.

LOL.
Worked for a company with a branch in Neu-Isenburg. When I went there, spent plenty of time looking around. Your places are brick, but not that solid. And are TINY.
About the only thing that I saw that impressed me was the idea of the outside shutters. Loved those.
But overall, not impressed.

It’s not European houses that are tiny, it’s US houses that are huge.

You are probably close to the mark there as increase on pay in Germany for union workers was simultaneous with 700 US non-union workers being fired after recent attempts to unionize the Tesla Fremont factory.

Shows why unionization is essential for employee protection and for good wages and benefits. No matter how benevolent the owner imagines themselves, the workers end up being subject to arbitrary rules and firings.

Unions have good relationships with companies in Europe. Both sides realize that they need each other to do well. There is no union vs company and company vs union mentality like here.

Until such time as North American companies realize this, it will be business as usual… that is, conversion of jobs to part time positions with no benefits to increase profits. Bigger profits means bigger bonuses for the execs. Capitalism at it’s best.

Yes, it is extremely unfortunate that the culture in the U.S. is such that there’s a very adversarial relationship between “labor” and “business”. This ties into the “zero-sum-game” which is the worldview of so many on the far Right, as well as all too many radical far-left political activists.

Presumably in Germany, as in most countries, labor and business have found a way to cooperate, perhaps participating in profit-sharing and employee ownership. Those countries which have not forgotten that compromise is a good thing, and that life doesn’t have to be a zero-sum game, are going to do better in the future. Sadly, the U.S. is going to continue to slide downhill, both economically and as player on the world stage, so long as we engage in bitter tribalism and zero-sum-game politics.

The various posts written from the viewpoint that unions in general are evil and “the enemy” are a sad reflection of this bitter divisiveness; this unfortunate habit of seeing anyone who has a different viewpoint as “the enemy”.

yeah, it used to be that way before reagan. Since reagan, things have changed and the unions vs businesses have become INSANE.

I will say that I agree with Musk that I would not want the UAW, (or for that matter any of the large established unions) in my business.
But, having a company having a private union for their employees is not a bad things.

Ironically Tesla seems to milk you for outrageous prices for supposed service if you believe CarandDriver’s long term test of the model S. The Bolt maintenance schedule is mostly a blank page. But yes OTA updates are a huge new thing and we can thank Tesla for that little piece of revolution.

Yet another Tesla hater post.

Most Teslae owners agree that Tesla offers superior service. Their quarterly checkups of Tesla cars are a model of thoroughness. Superior service is a big part of why Tesla’s customer satisfaction rating is higher than any other auto maker reviewed by Consumer Reports.

Is it expensive? Yes. You get what you pay for. But from various discussions of the subject on the Tesla Motors Club forum, it appears Tesla’s prices for their annual service plan are certainly no higher than the average for cars as expensive as the Model S and Model X, and noticeably lower than some comparable cars.

But I thought one of the big advantages that is touted here all the time is how the cost of ownership is so much lower than with a ICE car? Like is posted above, My Bolt’s maintenance schedule is pretty much rotate the tires, change the cabin air filter (if you want to) and change the fluids every 3 years. None of which requires me to go to the dealership. I can do it myself, or take it to the mechanic of my choice.

Looks like Grohmann workers successfully exploited Tesla’s highly depended and vulnerable position in a critical phase of Model 3 development for some serious arm twisting.

I wonder if the recent round of terminations in Fremont was done with this example in mind, avoiding that the discontent would exploit “production hell”to twist Tesla’s arm. Apparently there were relatively many union organisers involved.

Perhaps, indirectly, with this article, we are getting closer to the real cause of the bottlenecks holding up M3 production (or one of them at least)…?

Tesla didn’t handle this well. The union appears to have scared Musk into offering the deal he should have done initially: Offer a rich incentive practice that retains most of the talented employees for 5 years. (This is already done in the USA). Otherwise, the best people will leave to go work for other great German car firms and all the “dead wood” remains.

I have seen this many times myself, working for AT&T and GE during acquisitions. If the engineers and scientist can’t stand the new suits, especially if they are foreign with a different culture, the talented people leave real fast, snapped up by others. The bad and mediocre engineers (the vast majority, by the way), who never did a single creative thing in their lives, like create a patent, will stay like govt. workers, dead wood until retirement.

There is a lesson in this for Tesla and all of us, but I don’t know if they learned it. A wise Silicon Valley guy once told me: “The main assets of my company aren’t on any balance sheet. They go up and down the elevator every day. Piss them off, and we are dead in a year.”