Tesla (TSLA, Financial) has announced a salary increase at its Grunheide factory in Germany, signaling a strong commitment to its workforce amid industry-wide financial constraints. The decision follows last month’s move in which the company made 500 temporary positions permanent, highlighting the expansion of the factory, which employs around 12,000 workers. Notably, this development took place without the involvement of IG Metall, Germany’s largest trade union and advocate for workers’ rights.
Tesla’s Human Resources Director Erik Demmler pointed to the wage increase as a positive contrast to the broader German auto industry, which is currently dealing with job losses and factory closures.
This wage increase is particularly significant given the current challenges in the German automotive industry. Recently, Volkswagen announced plans to potentially cut wages for all its employees by 10% to maintain competitiveness and safeguard jobs as the industry transitions to electric vehicles and faces rising costs.
Tesla’s approach to raising wages is a stark departure from traditional automakers that are cutting costs to manage the shift from combustion engines to battery-electric vehicles amid supply chain disruptions and increased competition in global markets. By raising wages, Tesla not only sets itself apart from other manufacturers, but also demonstrates a willingness to meet workers’ needs regardless of pressure from German unions. The move could set a new trend in a sector that is struggling with downsizing and tense labor relations.
This article first appeared on GuruFocus.
