Hej,

The Swedish metalworkers’ union, IF Metall, has now been striking at Tesla for a month.

Doubts have been raised about the actual impact of the strike, as around 1,000 new Tesla vehicles have been registered since the industrial action got under way, according to the Swedish Transport Agency.

The union argues that it’s in it for the long game and that the strike hasn’t yet peaked.

They may be right, although time will tell. Eight other unions have so far announced sympathy strikes (which are legal in Sweden) and those are only just starting to take effect. The sympathy strikes may end up having a bigger impact on the conflict than IF Metall’s original strike.

One of the sympathy strikes is that Swedish postal workers this week began halting deliveries to Tesla offices and service centres. The knock-on effect of this is that it might not be possible to register new Teslas – as licence plates are issued by the Transport Agency and only delivered via mail carrier Postnord, whose delivery services the agency is bound to use under government procurement contracts.

“Insane,” Tesla CEO Elon Musk called it in his first public comment on the strike.

So what’s going to happen next, a reader of The Local asked us this week.

It’s unclear. Even the mediator called in to help the parties reach an agreement said that they don’t have anything to talk about. IF Metall won’t stop striking until they get Tesla to sign a collective bargaining agreement, but the Swedish branch of Tesla has orders not to sign one.

There are, however, a few potential options:

The unions give up

This is not going to happen.

Swedish trade unions are powerful by and large because they’re willing to cede power, in the sense of being consensus-seeking in negotiations with employers and understanding that you have to give and take. This is why businesses and unions alike are so protective of the so-called Swedish model – it allows them to set the terms between themselves with little involvement from law-makers.

This means that if you come to Sweden from abroad, it’s possible that unions may come across to you in one of two ways: either as too influential, or too meek. Compared to workers in many other countries, even in the Nordics, Swedish unions rarely strike. They compromise.

But when they do fight, they fight until their last breath.

To them, this conflict is existential. It’s not about whether workers are allowed to take an extra 10 minute coffee break, or get a 4 percent salary increase; those are all things they could compromise on. But if they were to let Tesla, from their perspective, get away with not signing a collective bargaining agreement, it would, as they see it, threaten the foundations of the Swedish model and their own raison d’être.

Collective agreements are at the heart of the Swedish model and labour market. Ninety percent of employees in Sweden are covered by one. Even tech company Klarna was just a few weeks ago forced to sign a collective agreement or see many of its staff walk out on strike.

This helps explain why IF Metall has managed to get so many other unions to join in the strike – everyone from dock workers to bin collectors. Even though they’re not directly affected by Tesla’s contracts, they see this as a fight for their own existence, too.

Add to this the fact that thanks to usually not striking, most Swedish unions have amassed large strike funds by saving their membership revenue for a rainy day. IF Metall alone has 10 billion kronor in its coffers, which is supposedly enough to fund a strike this size for 500 years.

Tesla gives up

This would be similar to what happened in 1995, when another US chain, Toys R Us, set up shop in Sweden but refused to sign a collective agreement, arguing that it was against their global policy. In this case, workers had additionally raised alarm of arbitrary wage setting by a top-down-run organisation which tried to micro-manage its staff – values that clashed with Sweden’s traditionally flat hierarchies.

Less than a year after Toys R Us had opened its first stores in Stockholm, Gothenburg and Malmö, the Handels trade union for shop workers ordered its members to strike in order to push for a collective bargaining agreement. Several other trade unions joined in sympathy strikes.

Toys R Us as a result was suddenly not able to get anything delivered to its offices, get its waste collected or even carry out financial transactions via its bank. The strike grabbed international headlines and shoppers were urged to join a global boycott.

The strike wasn’t supported by everyone – Prime Minister Ulf Kristersson, at the time a junior member of the Moderates, notably described it as a battle between “an American company that refuses to adapt” and a “union leader running on adrenaline” that was harmful to workers.

But after around three months, Toys R US’ deputy CEO flew to Stockholm to meet the Handels chairman in person and sign the company’s first collective agreement. Later that year, Toys R US sold all its stores in Sweden to Danish company Top-Toy and left the country.

Will Tesla, like Toys R US, be forced to cave? Or is the company just as stubborn as the unions?

Tesla and the unions compromise

It’s hard to see what the two parties would compromise about, as it’s an either-or issue.

Tesla could of course pull out of Sweden completely. On the one hand, it may prefer that to surrendering to the unions. On the other hand, Sweden is a valuable market for electric cars.

The perhaps likeliest option is that Tesla chooses the Amazon model.

Tech and e-commerce giant Amazon also famously refuses to sign collective bargaining agreements for its employees, and in Sweden it has so far opted to instead use sub-contractors who themselves have collective agreements.

That said, what speaks against this as an option for Tesla is that it may not be a feasible long-term option for Amazon either, especially if it wants to expand in Sweden. Amazon may also eventually have to pick a side – conflict or consensus.

In other news

Right, there’s other news too! 

After Sweden’s conservative government this week announced a new bid to revoke residence permits for foreigners with “a flawed way of life”, we looked into their various plans when it comes to revoking citizenships and permits. We also talk about it in the latest episode of The Local’s Sweden in Focus podcast for those of you who prefer to listen.

This year, food and electricity prices rose dramatically for Swedish consumers. What does the situation look like when looking ahead to next year?

Which country in the Nordics has the best English speakers? Apparently it’s not Sweden.

The Swedish Riksbank this week broke a streak of eight consecutive rate hikes, leaving the interest rate unchanged amid weakening inflation. This may be good news for household budgets, although it warned that it could still raise the rate in the new year.

Does Sweden’s flat hierarchy make people… boring? I felt very self conscious in meetings this week after Richard Orange wrote an article arguing (I think, or hope, tongue-in-cheek) that Swedes don’t do enough to keep their audience engaged and entertained in meetings.

Tickets for Eurovision in Malmö will go on sale next week.

Thanks for reading and have a good weekend,

Emma Löfgren

Editor, The Local Sweden

Inside Sweden is our weekly newsletter for members that gives you news, analysis and, sometimes, takes you behind the scenes at The Local. It’s published each Saturday and members can receive it directly to your inbox, by going to your newsletter preferences.