Will Elon Musk change Germany?

JIT’S A big week for Tesla’s “gigafactory” in Grünheide, near Berlin. According to the German press, the American electric car manufacturer will get the final green light from local authorities to start operations in a few days. In a way, it already is. On February 28, Tesla workers elected their first works council, a group of employees who, according to German law, co-decide with managers on things like working hours, holidays and training.

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For Elon Musk, the anti-union CEO of Tesla, this must be irritating. He tried to protect his first German factory from strict German labor laws by incorporating the company as Societas Europaea (SE), a public company registered under EU company law exempted from certain “co-determination” rules, such as the obligation for companies with more than 2,000 employees to allocate half of the seats on the supervisory board to workers. SEHowever, they are not exempt from having a works council.

GI Metall, Germany’s strongest union representing autoworkers, has been on a collision course with Mr Musk since he refused to sign collective wage agreements for the industry (the only other company not included is Volkswagen, which has its own generous wages agreement). He set up an office near the gigafactory to advise Tesla workers on their rights and listen to their complaints. He employed a Polish speaker to organize the employees Tesla hires across the border in Poland. He hopes persuading enough Tesla workers to join his ranks would give his campaign to join the collective wage agreement a boost; the union says the company pays top managers well, but workers on the production line receive a fifth less than those in BMW and Mercedes-Benz. More importantly, he sees the works council as the first step towards full co-management.

Mr. Musk must see it differently. He may have rushed the election in order to get a more sympathetic council. So far, Tesla has only hired about 2,500 workers, most of them experienced and skilled, out of a workforce that will grow to about 12,000. These employees are more likely to agree with management. The rest of Germany HER will monitor whether Germany changes Tesla to something less abrasive or whether Tesla changes Germany’s labor relations to something less consensual.

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This article appeared in the Business section of the print edition under the headline “A Lesson in Business German”

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