Tesla Ousts Supplier’s Management and Sweetens Pay Deal to Avoid German Strike
Tesla Motors has smooth-talked its Californian workforce out of unionizing for some time, but the labor war is now being waged on two fronts.
Since acquiringÂ German supplier Grohmann Engineering, that company’s workforce has accused Tesla of unfair wages and dissolving established business ties to focus solely on the upcoming Model 3. Elon Musk was forced to personally reassureÂ Grohmann, now calledÂ Tesla Advanced Automation Germany, to keep it from syncing up with autoworkers’ union IG Metall and going on strike.
Since the supplier is an essential part of the Model 3’s timely production, Tesla has changed tactics and is now throwing more moneyÂ at Germany and promising extra jobsÂ in the hope of avoidingÂ work stoppages. It also apparently removed the company’s CEO and founder,Â Klaus Grohmann, after repeated clashes with Musk over the firm’s future.Â
IG Metall has said Musk’s previousÂ job guarantees and the offer of employee stock options have reduced the prospect of a strike. However, itÂ is still demanding collective wage bargaining contracts and improved pay. According to Reuters, theÂ head of the company’sÂ works council, Uwe Herzig, statedÂ Tesla had confirmedÂ anÂ additional 1,000 euros ($1,089) in a one-off payment after Easter, on top of the existing job guarantees, pay rises, and stock options. ItÂ alsoÂ promised to create an additional 1,000 jobs at the German plant.
The negotiations were conducted without the input ofÂ Klaus Grohmann, whoÂ Herzig said mysteriously retired a month earlier.Â “In November we were told that everything would remain the same, and then on March 31 we were surprised to hear that he will retire,” Herzig explained during aÂ news conference.
Grohmann has not been seen at the company since, and it was assumed he left the company on his own accord. But the truth turns out to be quite a bit more complicated. When Tesla took over in November of 2016, itÂ initially planned to keep Grohmann on board, but disputesÂ with Musk over how to handle existing clients resulted in his departure. Musk insisted the firm focus on Tesla-based projects at the expense ofÂ Grohmann Engineering’s legacy clients, which included BMW and Mercedes-Benz.
When Reuters asked for clarification as to what happened,Â Grohmann declined to comment on the grounds of an existingÂ confidentiality agreement. However, it does not sound like he opted for an early retirement.Â “I definitely did not depart because I had lost interest in working,” Grohmann said, without elaborating further.
When questioned on the matter, a Tesla representativeÂ issued a carefully worded response, commending him for buildingÂ an incredible company. “Part of Mr Grohmann’s decision to work with Tesla was to prepare for his retirement and leave the company in capable hands for the future,” the spokesman said. “Given the change in focus to Tesla projects, we mutually decided that it was the right time for the next generation of management to lead.”
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April 27, 2017 at 10:36AM