Tesla Hikes Pay to Quell Unrest at Key German Supplier

Advertisement
By Reuters | Updated: 27 April 2017 10:18 IST

Luxury electric carmaker Tesla offered pay rises and job guarantees to defuse labour tensions at a key German supplier, whose founder and chief executive left the company late last month, German labour officials said on Wednesday.

Klaus Grohmann, former head of Grohmann Engineering, a maker of automated manufacturing systems, has left the company, Tesla and German trade union IG Metall said on Wednesday.

Grohmann Engineering has helped Tesla rivals Daimler and BMW build production facilities for electric car batteries. Tesla agreed to buy the company in November and it is key to the Silicon Valley carmaker's bid to succeed in the mass market by massively ramping up output.

Advertisement

Since the takeover, Tesla has given job guarantees and pay rises to the firm's 700 employees in the small town of Pruem close to the Belgian border, under threat of strike action organised by IG Metall, the powerful labour union which dominates Volkswagen .

Advertisement

The union said job guarantees and the offer of employee stock options have significantly reduced the prospect of a strike. Still, IG Metall is demanding a collective wage bargaining contract and improved pay. The union has complained that pay at Grohmann is 25 to 30 percent below an industry-wide collective agreement for the metalworker electric industry.

The head of Grohmann's works council, Uwe Herzig, said Tesla had offered another EUR 1,000 ($1,089) one-off payment after Easter, on top of job guarantees, pay rises and stock options.

Advertisement

In March Tesla offered employees a pay raise of EUR 150 a month. This was followed up just before Easter with an offer of EUR 10,000 in stock options for four years, and a pledge to guarantee jobs for five years, Herzig said.

Herzig said Klaus Grohmann, under whose leadership Tesla had planned to run the business, retired at the end of last month.

Advertisement

"In November we were told that everything would remain the same, and then on March 31 we were surprised to hear that he will retire," Herzig told a news conference, adding Klaus Grohmann had not been seen at the company since then.

Herzig said the founder's departure had been sudden and he had not had a chance to speak with Tesla Grohmann's new management, despite efforts to reach out.

Tesla confirmed Klaus Grohmann's departure on Wednesday.

"Part of Mr. Grohmann's decision to work with Tesla was to prepare for his retirement and leave the company in capable hands for the future," a Tesla spokesperson said on Wednesday. "Given the change in focus to Tesla projects, we mutually decided that it was the right time for the next generation of management to lead."

A Klaus Grohmann listed in the German telephone directory as living close to Pruem was not immediately reachable by phone.

Tesla has pledged to create an additional 1,000 jobs at Grohmann, which it has renamed Tesla Grohmann Automation, as it seeks to increase output to half a million vehicles next year from around 80,000 in 2016.

The union wants to see Tesla's management adopt pay agreements and negotiating tactics more in line with what other workers in the metalworking industry are getting.

Herzig said Tesla's acquisition of Grohmann made many workers leery that the company would now stop doing work for other customers, making it too dependent on Tesla's fortunes.

"We want additional guarantees given in more formal ways as an additional assurance to the workforce some parts of which need reassuring given the recent changes," Herzig told Reuters.

Christian Schmitz, head of IG Metall's Trier branch, said concessions made by Tesla to guarantee jobs were encouraging but they were not the collective wage and job guarantees customary among German unionised workforces.

Guarantees to individual workers are easier to rescind than collective wage deals that are binding for an entire workforce, Schmitz said.

© Thomson Reuters 2017

 

Get your daily dose of tech news, reviews, and insights, in under 80 characters on Gadgets 360 Turbo. Connect with fellow tech lovers on our Forum. Follow us on X, Facebook, WhatsApp, Threads and Google News for instant updates. Catch all the action on our YouTube channel.

Further reading: Tesla, Tesla Inc, Transportation, Elon Musk
Advertisement

Related Stories

Popular Mobile Brands
  1. Cloudflare Is Down Again For the Second Time in Weeks: See Affected Sites
  2. OnePlus 15R Surfaces on Benchmarking Site Ahead of India Launch
  3. ACT Fibernet Launches New Broadband Plans With Free OTT Subscriptions
  4. Motorola Edge 70 Will Launch in India Soon via This E-Commerce Platform
  5. Motorola Edge 70 With Pantone's 2026 Colour, Swarovski Crystals Launched
  6. Airtel Discontinues These Prepaid Recharge Packs in India
  7. Xiaomi May Launch This Tri-Fold Phone to Rival the Samsung Galaxy Z TriFold
  8. Nothing Phone 3a Lite Goes on Sale in India at This Price
  9. Here's What India Searched For the Most on Google in 2025
  10. OTT Releases of the Week (Dec 1 – Dec 7): Know What to Watch
  1. George Clooney-Starrer Jay Kelly Now Streaming on Netflix: All You Need to Know
  2. Google's Year in Search 2025 Reveals Gemini 3, Nano Banana Pro and Other AI Search Features Launched in India 2025
  3. Polar Loop Screen-Free Fitness Tracker Launched in India With Up to Eight Days of Battery Life: Price, Specifications
  4. Xiaomi 17S Pro Said to Be in Development, Could Launch After Xiaomi 17 Ultra Debuts
  5. Motorola Edge 70 India Launch Teased; Flipkart Availability Confirmed: Expected Specifications, Features
  6. Google’s Year in Search 2025: Top Trending Topics in India—From Gemini to Squid Games
  7. Vivo S50 Colour Options, Key Features Surface Online; Could Launch in India as Vivo V70
  8. CFTC Clears Path for Spot Crypto Trading on Regulated Platforms for the First Time
  9. Realme 16 Pro+ 5G Colour Options, Memory Configurations Leaked Again; Tipped to Launch With 7,000mAh Battery
  10. Cloudflare Outage Blocks Access to Several Websites Including BookMyShow, SpaceX, Coinbase
Gadgets 360 is available in
Download Our Apps
Available in Hindi
© Copyright Red Pixels Ventures Limited 2025. All rights reserved.