Mobility Portal, Spain
Date: April 15, 2024
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By Mobility Portal

Norway’s KLP may push Tesla on collective bargaining: What are the risks?

Norway's largest pension fund said it may request at Tesla's annual general meeting that the reluctance of CEO Elon Musk to engage in collective bargaining be addressed.
Tesla Norway KLP

KLP, Norway’s largest pension fund and a Tesla investor, may ask the electric carmaker’s annual general meeting to address CEO Elon Musk‘s reluctance to engage in collective bargaining, the fund said.

A strike by Tesla mechanics in Sweden, among the country’s longest labour disputes, has for months disrupted the automaker’s operations and attracted the concern of several Nordic institutional investors.

On Monday, Musk said “the storm had passed on that front”.

But the strike is continuing and the union leading the action told Reuters this week it may ramp it up.

KLP was a signatory to a December letter sent by Nordic investors expressing their concern about the strike in Sweden and Tesla’s reluctance to acknowledge a right to collective bargaining.

“That Elon Musk is saying that the ‘storm has passed’ is just his way to underestimate the conflict and the issue,” stated Kiran Aziz, KLP’s head of responsible investments.

“The conflict is still going and Musk does not really want to understand that collective bargaining is the backbone of the Nordic labour model.

Tesla did not immediately respond to a request for comment. It has previously said its Swedish employees have as good, or better, terms than those the union is demanding.

Aziz said Tesla had not answered the December letter, and KLP was now “trying to figure out how to escalate”.

When KLP disagrees with the management of a company in its portfolio, it first tries to establish a dialogue with the company, before moving to outline its expectations to the board, Aziz said.

“The next step with Tesla could be filing a shareholder proposal at its annual general meeting,” she said, without elaborating on its contents.

“We will continue to pursue this issue regardless of what Musk thinks so one advice would be that Tesla starts to respond on queries from investors.”

KLP holds 900,000 Tesla shares worth some 1.7 billion crowns (157 million dollars). Last summer it removed Tesla shares from its sustainable funds.

“We did that before the strikes began, because our portfolio managers were seeing that it would come to some controversy,” Aziz said. “The Tesla holdings is still in the other funds.”

Another Tesla investor, Swedish pensions manager AMF, told Reuters it also intended to act in connection with Tesla’s AGM but had not yet decided how.

“Our ambition is still to act in connection with the annual general meeting, and we will be happy to discuss this more when we have a set date fort the AGM, and when it is decided more in detail how we will approach this,” said an AMF spokesperson.

AMF had discussed the strike with Tesla this spring, the spokesperson said, “but we are still worried about the company’s lack of transparency, and their views on unions and workers’ rights”.

“We don’t believe that conflicts are good for long-term earnings,” he added.

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