Tesla’s showdown with trade unions across the Nordic region is threatening to spill over to the financial markets after a group of pension funds and asset managers sent a letter to Elon Musk urging him to change course.
Nordic institutional investors managing a total of $1 trillion in assets said they are “deeply concerned” about Tesla’s attitude to worker rights in Sweden and demanded the carmaker accept collective bargaining agreements for its staff, according to a letter sent Thursday and seen by Bloomberg News. Signatories to the letter include Denmark’s Velliv Pension & Livsforsikring A/S and AkademikerPension.
The group of at least 15 investors called out Tesla’s sustainability credentials over its challenge to the so-called “Nordic Model” by not letting mechanics at seven of its Swedish repair shops sign up to an agreement that covers basic rights such as minimum pay and gender equality. They also pointed out how the same model has benefited Tesla in building up “a significant market share” in the region, which trumps even Germany when it comes to deliveries of cars.
While the investors didn’t use the letter to threaten to sell the shares they hold in Tesla, cracks are beginning to appear elsewhere. Last week saw Danish fund PensionDanmark A/S become the first major asset manager in the region to publicly dump shares in the electric vehicle maker as a result of the conflict, selling its $69 million stake.
The dispute that began in October has already upended Tesla’s operations in the region as sympathy actions from other trade unions have spread to dockworkers in neighboring Denmark, Finland and Norway. From next week Tesla will have to transport its cars bound for Sweden via trucks from continental Europe.
The escalating blockade has extended beyond deliveries to registration plates and even trash collection at Tesla’s premises. Swedish postal workers have for several weeks refused to handle any mail or packages bound for Tesla locations, halting the delivery of license plates to dealerships.
But there are few signs either side of the conflict is ready to back down soon. On Thursday, Tesla published a job posting in search for a Stockholm-based public policy expert who needs to have “a proven track track record of getting regulatory changes made in the Nordics.” Chief Executive Officer Musk has previously called the situation “insane” and has been fighting back in Sweden with lawsuits to limit the conflict’s impact.
In the investor letter, the group asked for a meeting with Tesla’s board in early 2024 to discuss the matter. “We as Nordic investors acknowledge the decade old tradition of collective bargaining, and therefore urge Tesla to reconsider your current approach to unions,” they wrote.
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