Tesla announces pay raise for German plant workers amid union dispute
Xiaolu Chu
Tesla (NASDAQ:TSLA) announced on Thursday its plans to offer an increase in compensation to employees working at its German manufacturing facility, where unions have voiced concerns about wage levels falling below industry standards.
The U.S. electric vehicle manufacturer disclosed that it will officially convey the details of this pay raise to its workforce in November, further noting that it had already increased wages by 6% in the previous year.
In contrast to many other automotive manufacturers in Germany, Tesla currently lacks a formal collective bargaining agreement governing wage structures. Under the terms of last year's collective bargaining agreement, employees at Volkswagen (OTCPK:VLKAF), Mercedes-Benz (OTCPK:MBGAF), and BMW (OTCPK:BMWYY) were granted a 5.2% pay raise in June 2023, along with an additional 3.3% wage hike scheduled for 2024. Full-time workers were entitled to an inflation premium of 3,000 euros ($3,160).
The situation has sparked concerns from the German labor union, IG Metall, which has asserted that Tesla's wage offerings have consistently lagged approximately 20% behind those outlined in the established collective bargaining agreement.
Currently employing around 11,000 individuals at its German facility, Tesla is gearing up for an extensive expansion plan set to commence in the first half of the upcoming year. This expansion aims to double the plant's battery capacity and overall vehicle production.
IG Metall has reported that Tesla communicated the impending pay raise to its workforce through a series of meetings held at the plant during the past week. These meetings were organized in response to the union's intentions to visit the site and inform employees about potential union membership.
Last year, the Elon Musk-led company raced past BMW to take the top spot in U.S. luxury car sales. And, in Germany, where Tesla is producing vehicles outside Berlin, the company is seeking approval to double the plantâs capacity to around one million cars a year. 
Tesla (TSLA) will post its financial results for the third quarter of 2023 after market close on October 18.

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