Tesla workers are threatening to strike (TSLA)

pulse

April 18, 2017 4:53 PM

The Tesla employees who are ensuring production goals are met on time are threatening to strike over wages.

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The Tesla workers who are key to ensuring the automaker meets its lofty production targets are threatening to strike, The Wall Street Journal reported Tuesday.

The German industrial trade union IG Metall is calling for a worker strike at Grohmann Engineering, the German engineering company Tesla bought in November, claiming workers have been making 30% below union wages since Tesla acquired the company, according to the report. IG Metall could decide by late Tuesday whether it will call for a strike to negotiate new wages.

Tesla denied the claim that Grohmann workers were making 30% below union wages.

"We continue to work directly with Tesla Grohmann employees and are prepared in the event there is an action initiated by the union," a Tesla representative wrote in a statement to Business Insider. "We don’t anticipate any impact on the Model 3 timeline."

The California-based automaker acquired Grohmann as part of an effort to further automate its factories and speed up production.

In the past, Tesla has experienced severe manufacturing issues, most notably with the Model X, which suffered three years of delays. (The Model S also faced delays and was delivered in mid-2011 instead of 2010.)

The Model 3 will serve as Tesla's greatest test yet, and it is scheduled to begin rolling off assembly lines by the end of this year. Tesla ultimately hopes to sell 500,000 vehicles a year starting in 2018.

The electric-car maker missed on deliveries in 2016 (it shipped 76,230 cars, versus its forecast for 80,000 to 90,000) and must now contend with the Model 3 on top of Model S and Model X production.

There's a lot of pressure for Tesla to execute on the Model 3. The company is valued as high as Ford and GM despite selling a fraction of the vehicles.

Tesla factory workers in Fremont, California, are looking to form a union because of what they say are difficult work conditions and "excessive mandatory overtime."

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