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Can Elon Musk make Germany great again?

THIS IS A big week for Tesla’s “gigafactory” in Grünheide, near Berlin. According to the German press, the American electric-car maker will get the final green light from local authorities to start operations within days. In one way, it already has. On February 28th Tesla workers elected their first works council, a group of employees…

THIS IS A big week for Tesla’s “gigafactory” in Grunheide, near Berlin. German media reports that the American electric-car manufacturer will receive the final approval from the local authorities within days. It has already started in one way. On February 28th Tesla workers elected their first works council, a group of employees that in German law co-decide with managers things like working hours, leave and training.

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For Elon Musk, Tesla’s anti-union chief executive, this must rankle. He has tried to shield his first German plant from Germany’s strict labour laws by incorporating the business as a Societas Europaea (SE), a public company registered under EU corporate law that is exempt from some “co-determination” rules, such as the requirement for firms with more than 2,000 employees to give workers half the seats on supervisory boards. SE s cannot be exempted from having a work council.

IG Metall, Germany’s mightiest union, which represents auto workers, has been on a collision course with Mr Musk ever since he refused to sign up to collective wage agreements for the industry (the only other firm not included is Volkswagen, which has its own generous wage deal). It set up a local office near the gigafactory in order to help workers with their concerns and to inform them about their rights. To help organize employees from Poland, it has hired a Polish speaker. It hopes to persuade enough Tesla workers to join its ranks to boost its campaign for joining the collective wage agreement. The union claims that the company pays its senior staff well, but that the wages paid to production-line workers are a fifth lower than those at BMW or Mercedes-Benz. It sees the works council, which is the first step towards full co-determination, as most important.

Mr Musk must see it differently. Musk may have rushed the election to secure a more sympathetic council. Tesla has so far hired only around 2,500 mostly senior and skilled workers, out of a workforce that will grow to 12,000 or so. These employees are more likely to be able to communicate with management. Deutschland AG will watch to see if Germany makes Tesla less aggressive or if Tesla’s labor relations become more consensual. #

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