Tesla’s Nordic fallout deepens with court loss, widening embargo
ELON Musk is facing a deepening crisis in the Nordic region after Tesla suffered a fresh legal setback over a labour dispute that is also stoking investor concern, just as a union in Finland announced sympathy action against the company.
On Thursday (Dec 7), the electric vehicle maker was told by a Swedish court that a labour union blockade of its mail would not be lifted, pending the final decision of the case. The initial ruling means the company still cannot receive licence plates, effectively pausing the delivery of cars to customers in its fifth-biggest market in Europe.
Tesla did not provide strong enough arguments “as to why the company would suffer harm from these parcels not being handed out” before the case concludes, the court said.
Postal workers are refusing to deliver Tesla’s mail in solidarity with employees at seven Swedish repair shops, who were called to strike in October as a result of the US company’s refusal to sign a collective agreement covering basic rights such as pay levels and working hours.
Thursday also saw the first major institutional investor in the region publicly dump shares in Tesla in response to the dispute. Danish pension group PensionDanmark did not disclose the size of its stake to Bloomberg, but local media Frihedsbrevet reported it was about 400 million kroner (S$77.5 million).
The breakdown in relations has spread to neighbouring Denmark and Norway, where unions have warned they will block shipments of Tesla cars. In Finland, the Transport Workers’ Union decided to enforce the embargo across all of the country’s ports starting Dec 20, after Swedish unions asked Nordic peers to join in sympathy actions.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
“It’s a crucial part of the Nordic labour market model that we have collective agreements and unions support each other,” said Ismo Kokko, president of the Finnish union. Action by the Finnish port workers means Tesla vehicles or components destined for Swedish markets are not loaded by dockers, the union said.
Thursday’s legal setback comes a day after another Swedish court – in a separate lawsuit brought against the Transport Agency – withdrew a ruling favourable to Tesla that had allowed the carmaker to pick up licence plates for new vehicles directly from the company that makes them, instead of relying on postal workers.
“Very significant risks”
While no other Nordic pension funds have added Tesla to their exclusion list, investor pressure is beginning to be applied on the carmaker.
Velliv Pension & Livsforsikring, which manages about US$47 billion, told Bloomberg it was “aware of the challenges associated with Tesla” and expected the company to change its behaviour, a spokesperson said. The fund has contacted its ESG surveillance partners, asking them to initiate a dialogue with Musk’s firm on behalf of Velliv and other investors.
PensionDanmark, the fund exiting Tesla, said it had initially contacted the company in an effort to persuade the company to sign a labour agreement. Tesla’s chief executive has called the Swedish labour action “insane”.
“As the conflict now spreads to Denmark and because of Tesla’s recent very categorical refusal to sign agreements in any country, we’ve come to the conclusion that we as investors at the moment aren’t able to influence the company,” the fund said by e-mail. “That’s why we’re now putting Tesla on our exclusion list.”
The chairman of the 3F union that’s behind the Danish strike, Jan Villadsen, is also a member of PensionDanmark’s board. The fund has more than 800,000 members and US$45 billion in total assets.
In Sweden, the joint ethics council of the state-owned AP Funds – whose combined assets total about US$247 billion – has reached out to Tesla to discuss workers’ rights and is “following the development closely”, chief active ownership officer Anna Magnusson said.
The chief executive running another Danish fund, AkademikerPension, which has about US$24 billion in assets, said Tesla’s stance on labour rights means it has long been included on the fund’s watchlist for investments it monitors more closely.
“It seems it hasn’t dawned on Tesla’s management that proper working conditions create more value and fewer risks in companies,” CEO Jens Munch Holst said. “The labour dispute may spread, and as an investor we see very significant risks in relation to Tesla’s ability to conduct business and thus provide a reasonable return to our members.” BLOOMBERG
Share with us your feedback on BT's products and services
