Tesla Prepared For Potential Strike, Shouldn’t Impact Model 3 Production



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

Tesla is continuing to work with Grohmann employees and is prepared to handle a strike if one occurs, though the automaker doesn’t see any action affecting the Model 3 production timeline.

As we reported last week, a worker strike at Tesla acquired Grohmann Engineering is a ultimately a possibility. This didn’t come as a huge surprise, since once Tesla took over, and created Tesla Advanced Automation Germany, changes were imminent. We shared that Tesla will no longer allow the former supplier to work with its other longtime customers, namely “German automakers.”

While some might see this as unfair, or even a low blow to rivals, it really isn’t sensible for Tesla to be assisting its competitors’ automation needs, especially when it can likely barely satisfy its own.

Tesla Model 3

Tesla doesn’t “anticipate any impact” on the Model 3 production timeline, even if a strike plays out.

Model 3 production constraints and timelines make it so that Tesla needs to be super-focused on its own needs. Supplying others would just not be intelligent at this juncture. But, Grohmann employees have become used to their work and which companies they work with, so it is expected that they will react. Added to this, the employees are well aware of Tesla’s market cap and popularity, so why not attempt to gain some leverage?

IG Metall, a German labor union involved in the impending strike, asserts that Tesla Grohmann workers are unhappy with current wages. At this point, Tesla is arguing that it has compensated employees with a bonus, as well as a stock grant.

The union in Germany is known to have a great deal of power over other automakers, including General Motors and Volkswagen, and German laws work hard to protect workers and support union interests, so Tesla is not taking the threats lightly. However, the company stated:

“We continue to work directly with Tesla Grohmann employees and are prepared in the event there is an action initiated by the union.”

Tesla has assured that it doesn’t “anticipate any impact” on the Model 3 production timeline, even if a strike plays out. However, a lengthy strike, and continued pressure from IG Metall, will surely not “help” the automaker in its endeavors.

Source: USA Today

Category: Tesla

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26 responses to "Tesla Prepared For Potential Strike, Shouldn’t Impact Model 3 Production"
  1. This kind of reminds me, to loosely paraphrase a past German issue, “This Strike is but one plank in Solving the ‘Tesla Problem’ that is taking away Market Share from German Automakers!”

    What is the deal with these employees and wages?

    Were they suddenly dropped from the wage they were Happy At?

    Are they upset about not being able to Strong Arm their Fellow German Automakers, now?

    Are they unhappy with moving to support the move to Electric Transportation in general, and Tesla, in Specific?

    Are they not up to the task Elon has set before them, and the Pace he Expects of them?

    Here is an offer I think they should get: Tesla puts the funds for a Bonus, in a separate Bank and a Trust Accout, so it is set aside from operating capital, for an 18 Month to 24 Month time frame; then if they deliver on time and smoothly, with no interruptions, the Performance Bonus is fully paid out!

    If any obvious and public displays of disruption occur, the Bonus will be reduced by 1% per day for the first 7 days, 2% per day for the next 7 days of disruption (Total of 21% drop in the bonus by then), and 5% per day for the next 14 days (14 x 5% = 70% additional drop, netting a 91% drop in the bonus! After a 28 day work disruption, full Bonus is dropped, wages will be capped, and if after 60 days, Stock Options Recinded.

    Potential might exist to sue the union for various matters, as well!

    All stuff they might want to consider, along with a notice to them, that if they do well in this first move for the Model 3, there are 4 more Vehicle Production Lines that they could be working on, including, but not limited to: Tesla Semi, Model Y, Pickup, and New Roadster!

    1. notting says:

      IG Metall startet that before Grohmann became part of Tesla: http://www.igmetall-trier.de/aktuelles/meldung/grohmann-bald-mit-tarifvertrag/


    2. Dütschmän says:

      You know the story about Walmart comming to Germany?
      They had to retreat loosing lots of money, because they didn´t respect german work culture. (e.g. There was a rule, that forbid relationships between coworkers – rules like this are simply illegal in germany)

      If you want to take advantage of german engineering DON´T act like you are in the US, because you aren´t.

    3. Rich says:

      “there are 4 more Vehicle Production Lines that they could be working on, including, but not limited to: Tesla Semi, Model Y, Pickup, and New Roadster!”

      Don’t forget about the Tesla mini-bus/miniVan Tesla is planning on. I believe it’s based on the Model S/X platform. That makes 5 production lines in the next 2 to 4 years.

  2. (⌐■_■) Trollnonymous says:

    To hell with them and close the facility.

    They didn’t complain before Tesla acquired them now all of the sudden it’s an issue.

    Tesla even made their job more simple. They only have to know Tesla products and not other companies.

    This will only cost Tesla more money in the long run.
    Let them strike, then close the facility claiming loss of revenue due to the strike zero output so now you have to take cost cutting measures and since this facility did nothing, it’s the first to go!!!!

    Unions are a cancer that will kill it’s host.

    1. As I mentioned above, maybe they need to show both the Sword, and the Carrot!

      I just think some of them have their pride hurt, because the boss sold them out to ‘The Americans’, and they are ticked off!

      1. Rich says:

        The Carrot – Tesla already offered them a 150 Euros / month increase in wage + 1,000 Euros one time bonus + 10,000 Euros in Tesla stock options. This is an incredibly generous offer from Tesla!

        The stick – Hopefully Tesla made this a one time offer with a very short expiration date. Any employee that doesn’t except before the deadline gets nothing!

        1. Roy_H says:

          Can someone explain to me what the difference is between “Tesla stock” and “Tesla stock options”?

          If they were still under Grohmann Engineering would they still be threatening a strike and would they be expecting more than 150 euro increase?

    2. notting says:

      They startet that before Grohmann became part of Tesla: http://www.igmetall-trier.de/aktuelles/meldung/grohmann-bald-mit-tarifvertrag/


    3. EVA-01 says:

      I couldn’t agree more. Enough of this middleman nonsense, you are either an employer or an employee. Don’t like the pay, negotiate with boss. If that doesn’t work, seek employment elsewhere.

      1. Nick says:

        No other jobs available? You can listen to your master or starve under a bridge!

    4. Rich says:

      Maybe it’s just me, but I think Tesla is in a great position.
      Only 1/2 the employees are union. The company is located in Prüm, Germany (population 5,253). The automation group employs over 10% of the population. LMAO
      Tesla just cancelled 5 to 6 other contracts, leaving the entire staff to work on Tesla production lines. Even at 1/2 the manpower, this is still a lot better than it was.
      Let the 1/2 that’s union strike. They can sit on a picket line for months without pay while Tesla moves forward 3x faster than it was and at a 30% to 40% reduction in operating costs. *shrug* what’s the down side here? Somehow, I doubt Prüm can absorb 300+ automation engineers into its other businesses.

  3. notting says:

    1. A threat?! Very unhappy employees are a threat for the productivity/quality. But calling it a threat when employees are using their rights to get better conditions sounds like somebody who doesn’t want employees but want to own slaves 🙁
    2. Like all German car manufacturers founded temporary employment companies some years ago because law was changes:
    – Far less wages/bonus even if they’re doing exactly the same work.
    – Easier to fire them.
    – Less rights concerning the company where they’re actually working (like the car manufacturer).

    BTW: IG Metall started that a longer time ago before Grohmann became part of Tesla.


    1. floydboy says:

      Hadn’t heard exactly what their complaints were about Grohmann. What was the main problem with Grohmann?

  4. Four Electrics says:

    Um, if the strike won’t affect Model 3 production, then why did Tesla buy Grohmann? The stated reason was to help Model 3 production! Oh, the propaganda I see on this site, each and every day.

    1. EVA-01 says:

      Lol it’s pretty funny to be honest

    2. EVfan says:

      Grohmann Engineering produced the Robots that are used on the Model 3 production line and have no involvement in manufacturing the vehicle itself.

    3. Shaun says:

      They didn’t buy the company yesterday. It happened last year. The equipment has been in production for months now and is set to ship out shortly. July is just around the corner after all.

    4. F150 Brian says:

      I have no inside information but it could be that tesla needs more than one line to meet production targets. So the line that is already there won’t be impacted and hence schedule is not at risk, but volume might be.

  5. EVA-01 says:

    Someone with actual knowledge in the subject, please answer this question: Are unions mandatory in Germany regardless of what industry it is?

    1. lo says:

      No, but staff association/workers’ council is. (except for very small companys)

  6. CLIVE says:

    “Unions are a cancer that will kill it’s host”

    Nailed it!

  7. BrianinPHX says:

    If wages are already competitive; work with the union to give “some”, but roll the dice and see what the workers do. If the strike is long and looks like its going to be an ongoing negative story then bring the intellectual property to the US and keep the facility there in mothballs until a better working relationship can be established. If that happens, then bring back fewer of the jobs than existed before and have work going on in both the US and Germany (no one union could coordinate to stop both – shouldn’t). I’m a Tesla bull and this company is going to be one of the world’s largest. Establish good relationships and also a standard that everyone can see clearly. You’d hate for every acquisition to be like this one where unions look for leveraged advantage; NO, just do what is right and let the chips fall where they may. The next deal will be better because this one was handled against a standard. Deals in the future can be good for everyone because all parties will know exactly how Tesla reacts to different stimuli. Don’t be a victim. Just do what is right and if it costs, well that’s ok.

    1. floydboy says:

      Well said!

  8. Albertito says:

    Welcome to Europe gringos.

  9. Vexar says:

    The Model 3 robots shipped last Fall. I remember pictures of the freight convoy. Remember, they did a production run in February to test it out. Tesla wanted the intellectual property and thought leadership.
    I can see Tesla luring key staff into a relocation state-side and shutting down the plant. There is no reason to keep them in Germany.