Tesla’s gigafactory electrifies culture shock between California and Germany

BERLIN, Oct. 7 (Reuters) – With final approval from his German plant in a few weeks, Elon Musk of Tesla (TSLA.O) will make an appearance in the small town of Gruenheide this Saturday to host a regional fair.

Despite pandemic-related restrictions limiting gatherings in Germany to less than 5,000 people, Tesla applied for – and was granted – a permit to have 9,000 at the October 9 “Giga-Fest” after local authorities agreed. that the event would be safe for COVID. Read more

In the wake of authorities allowing the company to innovate at its new location even before final approval has been granted, environmental groups say this is just the latest example of Tesla having too much leeway to act. disruptive way in Germany – a trend they worry will continue.

Tesla did not respond to a request for comment.

The pre-approvals Musk received from local authorities to build without final approval are legal, but rarely used by German companies due to the risk involved: if final approval is not granted, Tesla has to pay to demolish everything.

While some lament Musk’s approach as rejecting German caution, others – who say German regulations governing planning, employment and environmental concerns are unnecessarily restrictive – welcome the influence he could have on the country’s corporate culture.

“I am fully convinced that Tesla can have a positive effect on Germany,” Brandenburg Economy Minister Joerg Steinbach, a prominent defender of the plant, told Reuters.

“The basic idea of ​​taking a close look at the current legislation and seeing if it could possibly be modernized – without risking legal weight loss – in my opinion absolutely deserves to be considered.”

The country’s powerful unions are already gearing up to fight for German-style contracts for Tesla workers, environmental groups are set to oppose any further expansion plans, and locals are suspicious of “American ways.” Of Musk’s watch every move of the business.

“Tesla has to respect environmental protection laws, building laws and of course labor and unionization laws,” said Birgit Dietze, Brandenburg region manager for the IG Metall union and former member of the Volkswagen supervisory board.

Musk has made known his irritation with German laws and processes, saying in a letter to authorities in April that the country’s complex planning requirements conflicted with the urgency needed to tackle climate change.

Once in service, the plant will produce 500,000 electric cars per year and generate 50 gigawatt hours (GWh) of battery capacity, more than any other plant in the country.

Conversations between the union and the candidates indicate that Tesla, whose CEO is known for his difficult relations with the unions, is offering a salary 20% lower than the collectively negotiated wages offered by other German automakers, IG Metall said.

It is also shaking up conventional German contracts by offering packages with stock options and bonuses rather than a predetermined vacation pay.

Leading a more difficult negotiation with its workforce could create a competitive advantage for Tesla, including the choice to install its first European gigafactory in the homeland of Volkswagen (VOWG_p.DE), Daimler (DAIGn.DE) and BMW ( BMWG.DE) raised the issues of the global battle for the domination of electric vehicles.

Musk once knew German trade union power. When Tesla bought out German auto parts supplier Grohmann Automation in 2017, it set wages 30% below average, refusing to match collectively bargained wages.

After the company offered one-off bonuses and stock options instead, the unions dropped the threat of strike action. The unions say stock options were also discussed at the Brandenburg plant.

GERMAN CAR MANUFACTURERS CAN’T DO IT – BUT TESLA CAN

Of the 12,000 jobs to be created in the plant, 800 to 1,200 have been filled to date, according to IG Metall and Steinbach.

Tesla did not respond to a request for comment or questions about the recruitment progress. But data from LinkedIn suggests applications are low, with fewer than 10 applicants for most factory positions advertised in the past month.

Gruenheide is a 45-minute drive from the Polish border, and Tesla is expected to recruit workers there.

“20% below German wages is still a very good wage for Polish workers,” said Ferdinand Dudenhoeffer, an expert on the German auto industry.

“The German automakers couldn’t do it; they would have big problems with the unions. But Tesla can do it.”

Musk had planned to start production in July in order to deliver the Model Y car to European customers from Berlin – but local opposition and the late addition of a battery factory requiring plans to be resubmitted to authorities have delayed the process. Read more

The delay forced Tesla to deliver the Model Y from Shanghai, extending wait times and increasing costs.

In a document published online at the end of September containing the 813 objections to the plant filed with local authorities and Tesla’s responses, the company has repeatedly reminded critics that it is creating jobs and bringing Germany closer to its electric mobility goals.

“I understand the concerns. But some are selfish. It’s always the same – people want things like wind farms and electric vehicles … but not in their backyard,” said Ralf-Thomas Petersohn, 60 years old, inhabitant of Grunheide. member of the official German Tesla fan club.

A public hearing scheduled for September 23 for citizens to discuss objections to the plant has been moved online over fears it will become a “big-ticket event,” authorities said, a move some considered as a hypocrite given Tesla’s likely endorsement. request for a party of 9,000 people.

“It’s not about Tesla. It’s about whether you take citizen participation seriously,” said Michael Ganschow of environmental organization Gruene Liga. “We can’t just say, ‘You make electric cars, so you can do whatever you want.’

Reporting by Victoria Waldersee; Editing by Jan Harvey

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