Tesla hikes pay to quell unrest at key German supplier
It’s almost agreed that Elon Musk, the founder of Tesla Motors, SolarCity and SpaceX is a visionary and a man with trendsetting ideas. His project envisions a mass-retailed electric car, a solar energy rental firm, and a completely recyclable rocket. He even co-founded PayPal and performed as its CEO. No doubt, he is a dreamer and the most creative person in Silicon Valley,but even his plans could not imagine one thing that is how to manage a happy workforce.
At Tesla, product development cum design was supervised by Musk right from the start for models like all-electric Tesla Roadster and Model X. It has been Musk’s primary interest to build electric vehicles and switch to a green energy economy. But of late, there has been unrest at a major German supplier and issues relating to overworked staffs and stern confidentiality policies at the electric car production plant in Fremont,California.
The attempts to unionize by the Tesla workers in Fremont is fast emerging and getting affected by it is also the new phase of labor agitation in a large anti-labor Silicon Valley. If the unionization succeeds, it will be seen as an insult to the main ideals and startup tradition of Silicon Valley which is based on complete employee commitment. Since the inception of Silicon Valley, the attempts made by the union has been continuous, but has been restricted to service jobs that were misused through lack of payments.
The pay hikes and job assurances were offered by Tesla to pacify the labour unrest at a key German supplier, Grohmann Engineering, whose chief executive and founder, Klaus Grohmann resigned from the firm. It was Klaus Grohmann, under whose vision and leadership Tesla had determined to execute the business and whose retirement came as a big surprise.
Grohmann Engineering has cooperated with Tesla competitors Daimler and BMW to set up production units for electric car batteries. Tesla had now consented to purchase the company and it is crucial for the success of the Silicon Valley carmaker’s fortune in the mass market by upgrading its output.
In view of that, after the takeover, Tesla has extended job guarantees and increments to the organization’s 700 employees in the tiny Pruem town adjacent to the Belgian border, under the duress of strike action called by IG Metall, the strong labour union that influences Volkswagen.
Further, the labour union has declared that job guarantees along with the options of employee stock have considerable halted the strike possibility. Even now, IG Metall is persisting for a mutual wage bargaining agreement and upgraded pay. They have raised their objection on the payment at Grohmann falling below 25 to 30 percent of the industry-wide mutual contract for the metalworker electric segment. The union actually wants that the management at Tesla follow pay contracts and negotiating strategy that are in alignment with the terms and conditions of other wage earners in metalworking enterprise.
In fact, the acquisition of Grohmann Engineering by Tesla has made the workforce suspicious that the firm would refrain from performing the work of other clients, causing it to be heavily dependent on Tesla’s resources. IG Metall spokesperson has maintained that the concessions granted by Tesla on job assurances were encouraging, but did not belong to the collective wage plus job security that are accepted among German unionized labor forces. They hold that it is easy to cancel guarantees to particular workers compared to collective wage agreements that are mandatory for a complete workforce.
Compromises made by Tesla
Tesla has extended another 1,000 euro one-off charges after Easter, in addition to job security, pay increments and stock options.
In March, Tesla granted its employees a pay raise of 150 euros per month. This was backed up by a proposal of 10,000 euros in stock alternatives for 4 years simply before Easter and a job guarantee undertaking for 5 years.
Furthermore, Tesla has also promised to create an extra 1,000 vacancies at Grohmann, which it has rechristened as Grohmann Automation, and is looking forward to augment output to half a million automobiles next year from approximately 80,000 in 2016.
In finality, it can be said that the Tesla workforce in Fremont are in a rare position with regard to the level of labor struggle in America which is not tilted in their favor as yet. They are in fact caught between the middle-class anguish of Big Labor versus Silicon Valley. The workforce knows it pretty well that their boss, Elon Musk is a man who is clearly ahead of his times and is amongst the few thinking persons in America who considers that automation will replace manufacturing soon. In one word, he views very little to zero possibility in the long run of human production workforce in his tech empire.