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Pension Funds Asks Tesla To Respect Collective Bargaining

The United States (US) automaker Tesla Inc. will be encouraged to respect collective bargaining for its employees in the Nordic region in a joint letter to be sent by a group of pension funds this week, four of the funds said on Monday.

Tesla is facing a backlash from unions and some pension funds in the Nordic region over its refusal to accept a demand from Swedish mechanics for collective bargaining rights covering wages and other conditions.

“Tesla’s attitude against the right to collective bargaining is of deep concern,” said a draft of the letter to the carmaker’s management provided by Norway’s largest pension fund KLP.

The Nordic region’s labour market model combines high job mobility with income security for the unemployed through a long tradition of dialogue between employer associations and labour unions.

“(This model) has enabled the Nordics to thrive as one of the most prosperous and harmonious regions worldwide,” the draft letter said.

Tesla has managed to avoid collective bargaining agreements with its roughly 127,000 workers, and CEO Elon Musk has been vocal about his opposition to unions.

A labour dispute between Tesla and a Swedish trade union has sparked sympathy strikes across the region and prompted some pension funds to sell their shares in the company.

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Tesla, which has revolutionised the electric car market, says its Swedish employees have as good or better terms than those the union is demanding.

“As investors in Tesla, we recognise the company’s great contribution to the electrification of the transport sector, but at the same time call on the management to seek a resolution to the conflict,” Rasmus Bessing, head of responsible investments at PFA, Denmark’s largest non-state pension fund, told Reporters.

“PFA has chosen to be a co-signatory of a letter to the management of Tesla, where we draw attention to the fact that in Sweden and the other Nordic countries, there is a long tradition of collective agreements being entered into in a large part of the labour market,” Bessing said.

The deadline to co-sign the letter was extended to this week due to high interest from investors, according to Kiran Aziz, head of responsible investments at KLP.

Sweden’s Folksam and Denmark’s PensionDanmark said they will also sign the letter.

Norway’s sovereign wealth fund, Tesla’s 7th biggest shareholder with a $6.8 billion stake, last week said it would continue to push the company to respect labour rights such as collective bargaining.

The manager of that fund, Norges Bank Investment Management, was not immediately available on Monday to comment on the letter planned by other pension providers.

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