◼ BUSINESS Bloomberg Businessweek December 7, 202016
LIESA JOHANNSSEN-KOPPITZ/BLOOMBERG. DATA: EUROMONITOR INTERNATIONALstandardinGermany.Afterthecompanyignored
a letterfromIGMetallseekinga dialogue,things
startedgettingtesty.Ata protestinBerlin,hun-
dredsofworkersdecriedTesla’spoachingofa key
managerfromDaimlerAG.Anda localunionleader
releaseda statementadmonishingMusknottoview
wageaccordsas“theworkofthedevil,”butrather
asanessentialcomponentofpeacefullaborrela-
tions.“It’snotgoodforanautomobilemanufac-
turertobeinpermanentconflictwithIGMetall,”
saysChristianBäumler,deputyleaderofa labor-
affiliatedfactionofChancellorAngelaMerkel’sparty.
“Theunionhasorganizationalpower,it hasmoney,
it hasexperience.It canendurea longfight.”
Musk,too,hasplentyofpower,experience,and
especiallymoney—inNovemberhesurpassedBill
Gatesastheworld’ssecond-richestperson—andhe
rarelybacksawayfroma fight.Withhisfactoryrap-
idlyrisingfromthesandyplotadjacenttoBerlin’s
beltwayAutobahn,he’smanagedtoneutralizethe
bureaucraticresistancethatcanslowbigprojects
inGermany,courtingtopofficialssuchasEconomy
MinisterPeterAltmaier,whopromisedwhatever
is neededtogettheplantoperatingbymid-2021.
Musk’spressuretogoelectrichasstarteda “success-
fulrevolution”inthecarindustry,Altmaiersaidat
a conferenceonNov.24.“Withouthim,wewould
havenevereverachievedthis.”
TheTeslafactory,Germany’sfirstnewauto
plantintwodecades,promisestocreateasmany
as40,000jobsineasternGermany,a regionthatlost
mostofitsheavyindustryduringWorldWarII and
atrophiedduringthecountry’sdecadesofsepara-
tion.It’sbeingbuiltasdomesticmanufacturersand
supplierslayofftensofthousandsofemployeesin
anticipationoftheshifttobattery-poweredvehicles,
whichrequirefewerpartsassembledbyfewerwork-
ers.Thesiteis centraltoTesla’sEuropeangrowth
plansandsendsa signaltoBMW,Daimler,and
VolkswagenthattheU.S.upstarttheylongbelittled
orignoredhasarrivedontheirdoorstep.
Muskis nofriendoforganizedlabor.Whenan
employeeatTesla’splantinCaliforniain 2017 sought
assistancefromtheUnitedAutoWorkerstounionize
thesite,Muskfiredoffanemailsuggestingtheman
wasseekingtounderminethecompanyandlater
hintedthatorganizingthefactorywouldmeanno
morestockoptions.A judgelastyearreprimanded
TeslaforrepeatedlyviolatingtheNationalLabor
RelationsAct,a rulingthecompanyhasappealed,
sayingit wastheresultofa “smearcampaign”bythe
unionandunsupportedbythefacts.
ForIGMetall,theconcernisthatTeslawill
follow in the footsteps of Amazon.com Inc., which
has expanded in Germany without wage deals forits warehouse workers. Musk wants to run his plant
like a Silicon Valley startup—luring workers with
unregulated salaries, stock options, and perks such
as a “mega rave cave” party space. If he succeeds,
he might well threaten IG Metall’s ability to get
what it wants from other automakers, who could
point to lower costs at Tesla as they negotiate tough
cutbacks to pay for investments in electric mobility.
Already, Musk has helped set a more con-
frontational tone for German executives who’ve
long felt restrained by unions. VW CEO Herbert
Diess, a big fan of the Tesla boss, has repeatedly
clashedwithIGMetallandbemoanswhathe
callsthe“old,encrusted”structureoftheworld’s
best-sellingcarmaker. Suppliers Continental AG
and Schaeffler AG have vowed to cut thousands
of jobs and close or sell factories despite heavycriticism from unions. And Daimler CEO Ola
Kallenius has drawn labor’s ire by culling some
unlimited employment contracts in favor of more
flexible arrangements.
Despite the threat Musk’s company poses to
Germany’s big automakers, his foray into the birth-
place of the combustion engine may ultimately
prove a blessing for an industry that can be slow
to change, says Ferdinand Dudenhöffer, director of
automotive research at the University of Duisburg-
Essen. For unions, by contrast, there’s little upside
as Musk’s arrival represents growing peril for a
model that may have run its course. “Our corpo-
rate culture tends to keep things the way they’ve
always been,” Dudenhöffer says. “Musk is some-
one who can break that open.” �Stefan Nicola and
ChristophRauwaldTHE BOTTOM LINE A Tesla factory is being built even as German
manufacturers cut thousands of jobs to adapt to making electric
vehicles, which require fewer parts assembled by fewer workers.▲ An IG Metall
protest in Berlin over
Tesla’s poaching of a
Daimler executive