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Comment by nabla9 | Hacker News Reader

Small differences in labor law make all the difference.

In Finland, Tesla repair shops follow the minimums stated in collective agreements and Musk probably don't even know about it. In Sweden it's issue for him.

Finland has generally applicable collective agreements where employers should observe at least the provisions of a national collective agreement considered representative in the relevant sector. When a collective agreement is nationwide and covers over 50% of the workforce in a relevant sector, it becomes generally applicable and binding even for companies that did not agree on the terms.

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At this point the famed Swedish model shows its limits, IMHO.

> "It's about the Swedish collective agreement model, and there is a consensus on it, both politically and between the parties in the labour market, Seko's president Gabriella Lavecchia told Reuters by email.

And yet this is not a legal obligation, as far as I understand, and Tesla is acting lawfully. So the model seems to be that there are unwritten rules and that the whole country is allowed to club you into submission if you don't follow them.

At this point it seems that at least some form of legal obligation (you give an example) would clarify what is understood to be compulsory... Transparent rule of law is also a model for a good reason.

From the outside it's a little odd (at least to me) that the Swedes seem adamant that Tesla must accept a collective agreement and also that there is no need to make that the law. That's the peculiarity, IMHO.

There are unwritten rules everywhere. The nice thing is that when the unions in Sweden do strike unlike in the US where maybe they will get some support, there is massive groundswell of support behind them to actually get the company to make a change.

The fact that the whole country collectively agrees gives the workers far more power.

How does a country give workers more power? By creating a business-friendly environment. The more companies operate in your country, the more choice of employers.

Treated badly? Go work for a competitor. That’s how you put pressure on companies to treat staff better.

Well, we see how that's going in America and it's a race to the bottom. 10 years experience, bachelor's degree required, starting pay of $35k/yr.

A society cannot rely on a business whose sole motivation is profitability to provide power to what they view as a liability, not an asset.

America is in top three nations of the world for wages (OECD 2022). Sweden is 18th.

https://en.m.wikipedia.org/wiki/List_of_countries_by_average...

I mean, in your list Iceland is the number one nation for wages which very much follows a similar Scandinavian model.

An island that formerly was a tax haven isn’t a great example

Wages on their own mean nothing.

That's not "wages", that's "average wages". I don't expect much but I at least expect a passing knowledge of statistics and intellectual honesty. If most people have nothing and one billionaire joins the group that doesn't make everyone rather wealthy even if it drastically raises the average.

Keep in mind that there was a massive rise in C-level and especially CEO compensation compared to most other wages. Arguably this can be traced back to a specific book being rather popular among wealthy investors and entrepreneurs that argued CEOs are underpaid, which many CEOs agreed with and convinced the investors to also agree with. But this does nothing for the wages of anyone outside this group because C-level compensation is orders of magnitude removed from that of anyone lower in the ladder.

Which book?

Not Grapes of Wrath

Okay then, so you'd prefer to analyse median wages, rather than mean wages?

The US has the 3rd highest median wages, and Sweden has the 14th highest median wage.

https://worldpopulationreview.com/country-rankings/median-in...

The US is #21 on the Human Development Index, a holistic measure of quality of life. Sweden is #7.

Plus the US is very work cultured your entire identify is what your job is. In many countries of the world a job is a job and your life and family are the important things not your job. Of course we need money but what is the point if your life is crap!

It's not up to a company to "provide power" to its employees.

It's up to the company to fulfil its mutually-agreed terms of contract to those employees. Which in most cases means giving them the dignity and security of a monthly paycheque.

In a free market economy (that isn't overly constrained by government and unions), employees can gain all the "power" they like by starting a company of their own, and setting whatever rules they like.

If you're seeking "power" without taking responsbility (i.e. running your own compnany), sounds like you want to indulge in politics, as opposed to a good-faith employee-employer relationship.

That solution relies on a lot of things having a greater effect than they actually do. It fits the pie in the sky solutions libertarians seem to like so much. Such as high healthcare costs can be fixed by creating greater choice via lowering the barrier of entry to becoming a doctor. The free market, in fact, is not actually the solution of all of society’s ills. Unions raise wages. Anti union laws and or lack of unions results in lower wages. People also just don’t have the kind of job mobility libertarians assume.

- Libertarians assume more job mobility than actually exists.

- Libertarians overlook all the problems with markets that Adam Smith identified. It's as though they never read the second half of the book.

- Libertarians overlook how existing players raise barriers to entry for existing markets.

- Libertarians overlook the collusion between market players and government to share power and wealth between both.

- Libertarians make many, many, many assumptions that are demonstrably false.

At this point all we can assume is libertarians know all this, yet keep advocating for libertarianism because it is they who seek the power and the wealth. That is to say, the libertarians are the bad guys, or, they're the stupid guys.

Libertarians are just people who thought they could learn everything they needed from studying economics without learning any history or sociology.

Everything has a simple solution until humans get complicated.

That's an excellent summary!

Unless you propose that there should be more corporations than people, I don't see how the number of companies significantly alters the power dynamics. We literally have industries where the number of job openings vastly outnumber the available talent and instead of better working conditions or compensation or participation this only seems to result in those companies pushing for the softening of immigration laws and reducing protections. The only times we see workers gain leverage is when they are able to form unions and use collective bargaining to avoid being fired. Even for superstar individuals there are limits to what they can demand for themselves and even then it doesn't trickle down to the other employees.

There's no market incentive for companies to "treat staff better" (which is really an oversimplification when it comes to basic things like following workplace safety laws, providing paid medical leave and health insurance, not cheap window dressing like foosball machines and free energy drinks) beyond the minimum you can get away with. Payroll is one of the biggest cost factors in most businesses if not the biggest. That means companies are always incentivized to cut labor costs where possible. This is why you say mass layoffs followed by share price increases.

If you really want "the market" to fix this problem, ban individual ownership of corporations and require all businesses to act as worker cooperatives. This gives every worker equal power in whichever business they decide to join and gives the owners an incentive to treat workers better because the workers are the owners. You could also do this incrementally by offering public grants to creating cooperatives or turning existing corporations into cooperatives (e.g. by creating a subsidized program to allow workers to "buy out" a bankrupt employer).

We don't want a top-down autocratic state so why should we accept a top-down autocratic corporation ruled by a single owner or a non-working board that is only interested in the resale value of the company, not its long-term profitability or sustainability?

That kind of sounds like pretty much any society: lots of unwritten rules that can be costly to violate.

If you try to write down every case of being a jerk instead of just having a society-wide agreement "don't be an utter jerk", you wind up with lots of fine print, rich lawyers, and at least as many people still being jerks.

Consider the complexity of a vending machine vs. a can where people can leave their payments... Any society probably has places where you need the former, and places where you can get away with the latter, but I prefer those societies where most of the places in between are on the can end of the spectrum.

Every culture has its own unwritten rules and customs. If you want to do business in a foreign culture, it's your responsibility to learn those customs and adapt to them. If you refuse to adapt and your business suffers because of the backlash, the cause of failure was your cultural insensitivity and/or ignorance.

> Every culture has its own unwritten rules and customs.

Many cultures have bribery as an unwritten rule and custom. Every official you run across is expecting a small bribe.

Should companies adopt that culture as well?

That's a good question almost every major international business struggles with. As far as I know, the usual answers are paying the required bribes quietly and refusing to do business in that culture. The third option, trying to do business without paying bribes, rarely works.

I'll argue a point I don't really agree with, namely that in this case bribes are fair.

Coiuntries are sovereign. Foreigners don't decide, that's a key outcome of the thirty years' war. So if you go to X, the polite, proper, non-imperialist thing is to follow accepted custom.

Of course, that raises the question of what "accepted custom" means. It's not clear to me that bribing is really accepted in the countries where it's a custom, widely accepted, rather than being something people do reluctantly.

Then you can for moral reasons refuse to do business there because you don't feel like playing in a crooked game. That in turn might have the effect of improving the world a bit.

Of course you can do that. If you do that, what else will you also do?

For example: Will you use oil from Saudi Arabia for your business? You could refrain because so much of the payment gets sidetracked to those 4000 princes, or because refraining brakes the climate changes a little bit, or even both.

The list goes on. There's much that's bad in the world.

Deciding to be principled about bribes and morally flexible about the rest seems… okay to me. Not particularly bad.

That actually seems like a really interesting question without an immediately obvious answer.

Without commenting on whether they normatively should adopt that culture, they should not be surprised if refusal to adapt to that custom results in business failure.

> Should companies adopt that culture as well?

The only reason international firms are sometimes a little circumspect about that is because they also operate in home countries where bribery even in foreign countries is often against the socially enforced (written, in this case, but what is important is the enforced part, not written vs. unwritten) rules and customs.

E.g., https://www.trade.gov/us-foreign-corrupt-practices-act

> So the model seems that there are unwritten rules and that the whole country is allowed to club you into submission if you don't follow them.

You mean like rent and monopoly seeking and corporations try to buy politicians and eliminate competitors so they can force consumers into submission?

Looks like a case of using the power you have, like corporations do. Why do you take a dim view of collective action when capitalism is a system that is slanted toward rich corporations?

Also Musk here is typically full of shit: he makes various libertarian noises but Sweden's system is largely untouched by government, it's an understanding between larger corporations and workers (unions). Sweden even got an opt out from EU minimum wage laws to preserve this understanding. Musk should be rejoicing the unfettered capitalism, but in reality he just wants everything his own way, and thinks he can get it.

The point of the Swedish model is to avoid micro management from the state and instead of mandating work regulations through law businesses and unions can negotiate sector specific agreements that suits the very people and companies that it affects.

Businesses and unions are better at knowing the needs of companies and people than what any government is.

Not everything has to be achieved through laws.

In Sweden we generally prefer to avoid laws whenever possible, deferring to best practices, common sense and business agreements.

That’s a much much nicer model than what we now get from eg EU where we get micro-level law making that deals with everything and more

It's not micro management, it's a major point. Again, it looks like the consensus is that Tesla must accept a collective agreement (content to be left to the parties to negotiate). So why is that not mandated? IMHO, you can't be outraged that Tesla is refusing, or at least trying not to have one, when the law effectively says that they don't have to.

The level of reactions against Tesla does not make the system look 'nicer' than others: Maybe effective but actually quite brutal.

It’s there if employees want it and in eg many smaller companies there are no such agreements.

It’s up to the companies and unions to handle.

When Tesla has refused that for 5 years + have a global policy to refuse, then they are not handling it, which makes companies and unions react.

To be clear: Companies in Sweden largely prefer this model over one governed by law.

Who said Sweden does things this way in order to look nice?

Not relying on laws like this allows for more adaptability to local conditions or preferences, if the system allows this, while also having mechanisms for enforcement when a company has simply decided "we don't do business that way, and we don't care if that runs counter to the local norms".

>The level of reactions against Tesla does not make the system look 'nicer' than others

It's not supposed to be nice. Swedish labour has understood a simple reality, you don't fight on your opponents terms. Elon Musk has a competitive advantage at hiring lawyers and buying politicians. So they pick the battle where they can actually win, collectively on the factory floor.

I haven’t seen anyone outraged with tesla. If anything, we swedes are confounded that tesla can’t seem to understand how running a business works in sweden. It’s not that hard.

And just like tesla have the right to refuse signing, the people of sweden has the right to strike.

> The level of reactions against Tesla does not make the system look 'nicer' than others: Maybe effective but actually quite brutal.

You went from calling this a bit “odd” and “a peculiarity” to “actually quite brutal” in the span of two comments. Jesus Christ the level of JAQing off in these Tesla threads from “the outside” (I wonder where) is insane.

It's actually really simple: nobody is being forced. Tesla doesn't have to accept a collective agreement, they can just pull out of Sweden and nobody would bat an eye. But what they can't do is to expect Swedes to work as though they are Americans on American soil. It's Tesla that is the guest here, and as a guest you abide by the customs of your host. Don't like it? Don't visit.

No one is outraged, just confused.

It's simple. Above a certain size, you either get an agreement or no one will do business with you.

Put this way, it should tickle every libertarian mind. Free actors operating in an open market.

> In Sweden we generally prefer to avoid laws whenever possible, deferring to best practices, common sense and business agreements.

I think I would've agreed with this sentiment in the past.

However, the last 7-8 years in the US have shown that (at least in politics) rules need to be spelled out. We had a bunch of informal agreements of what people in certain positions should do or not do, but as we have seen someone will eventually come around and look to test the limits.

It looks like Elon Musk is looking to test the limits of business expectations in Sweden. I hope Sweden fares better than the US did when the political expectations were being challenged.

> However, the last 7-8 years in the US have shown that (at least in politics) rules need to be spelled out. We had a bunch of informal agreements of what people in certain positions should do or not do, but as we have seen someone will eventually come around and look to test the limits.

People coming round to test the limits is fine, the problem is that in the US parts of the ruling class has decided the (short term) benefits of tolerating severe transgression to those limits is worth it, in effect simply removing the limits.

The problem is simply that limits don't work if there is no the willingness by the people in power to enforce them, and this regardless of if them are informal or formalised limits. Many things things Trump did were simply illegal, but since Congress didn't impeach for these crimes they just become "controversial actions".

I would also add that the laws in the US are very hostile to labor. For example, it is extremely difficult to organize a workplace. Even if a workplace is organized, companies can just refuse to negotiate a contract. See Starbucks…

Tesla doesn't have to agree but then the workers don't have to stop striking. It's called collective bargaining for a reason. It's no less unreasonable for the workers to keep striking until Tesla gives up than it is for Tesla to try to have its way and sit on their thumbs until the strikes end. There's just no good outcome for Tesla in the latter case.

This isn't about some sort of grandiose libertarian stand. Whether this behavior by Tesla is influenced by Musk or not, it perfectly matches his attitude to workers' rights, consumer protection laws and so on. At one point he explicitly stated that the US Democrat party was being controlled by unions and class action lawyers. Contrast this with Musk's excuses for censoring Twitter in Turkey when the Turkish government threatened to block Twitter. He doesn't stand up to "bullies" or "authoritarians", he just doesn't like being told what he can or can't do by those he sees as beneath him (e.g. workers insisting on adherence to workplace safety laws or industry standard compensation schemes).

Martin Shkreli recently violated parole and "the whole country [i.e. internet] is allowed to club you into submission..." This is what's called public disgrace. Like when a murderous thug cop gets shanked in prison. Or that stupid kid who shot people with an assault rifle at a protest having zero future prospects. Nobody is obligated to do anything for jerks.

According to Tesla, the agreement which employees have in Sweden is already better than the minimum bar set by union, so Teslas issues appears to more out of principle than out of actual issues with the agreement itself. Or Tesla is lying and the agreement with employees is not actually better.

Both parties act out of principles. The conflict is about power dynamics, first and foremost.

Yup, and one is the principles of a large car company from another country while the other is the social underpinnings of the countries entire labour market going back a century

That is exaggregated. This is IF Metall vs Tesla, not Sweden vs Tesla.

It isn't just IF Metall vs Tesla in practice. The result of this whole thing will impact Swedish labor standards as a whole by setting a critical precedent for both companies and unions. I'm not part of IF Metall, but also not naive enough to think this power struggle won't affect me or people I care about working in Sweden in the future.

It will affect you either way. It is difficult to tell exactly how but a union win will embolden the unions in Sweden general, and it is not certain that is an all out win. I realize that embolden is not a neutral word, but what is on the other side of the balance scale is investments in new jobs in Sweden vs elsewhere. Perhaps the balance will still be a net benefit to Sweden but we will see. I would have an easier time to understand the strike if it was about material conditions such as salary etc, but now it is an all-out power struggle about the type of agreement.

The fact that it will affect me either way is kind of my point in saying this is not just IF Metall vs Tesla. I consider a union win to be the best outcome here.

And for that reason it is the most likely outcome too. 'When in Rome...' Tesla has a lot to lose here: Norway, Sweden and to a lesser extent Denmark and Finland are early adopters and Tesla has large market share there. If they turn those countries against them it will have repercussions all over Europe. I'm in NL and have already heard people mention this conflict here and how it affects their view of Tesla as a brand and I think that's not unique.

Pick your battles and all that.

Absolutely not. It will not embolden unions in Sweden at all. They fully expect to win. Contract law is the fundamental issue here.

The only realistic alternative is Tesla leaving Sweden. Prospective owners would have to import their cars from other countries. It's not hard to imagine that situation.

I'm not a member of if metall (member of a lame yellow union) but I'm a Swede and it's us against Elon. I stand with the metallers in solidarity!

That's completely fine. I think many do. But it is not as black and white as some state it

I would say it's somewhere in the middle. You wrote that it's If Metall againt Tesla, but that's simply not the case. Other unions have already joined in so it's both technically incorrect and a bit misleading.

This would be true if there were not repercussions for the wider Swedish model, but since there are repercussions of rolling over it is Sweden vs Tesla

You can be certain that there are plenty of Swedes that see it differently, they are just less vocal

Perhaps? But everyone I've spoken to have been pretty vocal about it, although more along the lines of "Musk is a tool"

Tesla is a good opponent. Musk is generally despised. Electric vehicles are seen as fancy-pants toys for eco-freaks. So the usual people who come to the defense of big companies don't really feel the need to break a lance for Tesla.

This is specifically the case with the Sweden Democrats. A big motivator for them is a) bashing greens, and b) being a better alternative for the working class than the Social Democrats. Siding with a foreign billionaire over "salt-of-the-earth" workers is not a winning move.

I'm sure there are. To be frank, that matters little. All large employers are part of an employer's union. They don't see things differently. They all need this particular contract law intact.

Vocal or not, no one will not be able to affect this semi-voluntary system unless they control bascially the entire economy. This is unlikely to ever be the case, until maybe some supranational EU agreement changes the rules entirely.

If that were so, I think we wouldn't see other unions jumping to IF Metall's aid so readily

Swede here. You are absolutely mistaken.

This is a huge deal in whole of Scandinavia. Today Finland unions joined in. The other day both Norway and Danish unions joined in. Before that, many other Swedish unions joined in.

This is Tesla versus the Scandinavian model rather.

What I find interesting is that nobody at Tesla seems to be able to realize that when you go abroad you can't just export your home country's attitude to labor relations and that Tesla as a brand is suffering, not just in Sweden, but in the Nordics as a whole and in the rest of Europe as well. Even if they win they lose, and not just a little bit.

I’m sure plenty of folks at Tesla have come to this realization. I’m also sure they are smart enough to keep it themselves.

That's what you get when you're surrounded by 'yes' people. It's one of the main reasons that power corrupts: you no longer have anything to calibrate with.

Somehow I'd bet a large amount of money that Tesla is lying, considering that's what Elon is best at.

I’ve heard some form of this from every company fighting unions. If that’s really the case, wouldn’t it be beneficial to the finances of the company overall if the union is requesting less benefits?

Unions set the lower bar but if you want to be competitive you still offer higher rates. I guess Musk could sign this and give everyone a pay cut!

It depends on the contract negotiated by the union. In theory, the union can put a floor on pay, with cap and allow individual workers to negotiate higher wages if they are so inclined. The US sports leagues offer the best example of this.

Labor contracts cover a variety of issues, Tesla is cherry-picking their comparison IMO.

Does Tesla have a binding agreement with the workers on how to handle layoffs when business is bad?

Do they need to? That's what laws are for, in the case of Sweden it's the Employment Protection Act.

The union can negotiate a better deal but it's not wild west at-will employment like in the US.

This is about mass layoffs, not terminating individual employees for "personal reasons".

I am not an expert, but I think the union claims that this is one thing that is now worse for the Spotify employees who are laid off?

Meaning, sure, there is a degree of basic legal protection, but during layoffs, having a collective bargaining agreement will give you better conditions than that?

This law also covers layoffs, even to the point where it dictates in what order employees can be laid off. In general the IF Metall collective agreements don't have any additional worker protections for the case of mass layoffs or individual terminations, they usually only cover temporary lay offs.

I haven't seen what they are actually asking for in the case of Tesla Sweden. In Germany the discussion is mostly related to wages, safety/accidents and shift planning.

This is a massive simplification to the point of being misleading. Those laws are largely superseded by contract law, which is exactly why collective agreements are made, and the order in which layoffs are made are usually among the first to be negotiated. There are lawyers that base their entire careers on such matters.

Swede here. That is what every company that doesn't want to play according to the Swedish model says. I worked at one of those companies and yes, pay and benefits were better, up until I reached a certain age where the "collective deal" would have been better for me. Was this tiny detail communicated clearly to me? Of course not, I heard it from a colleague who was older and had been at other companies. Was it a lie that "we have a better deal"? I wouldn't say so. Am I still at that company? No.

One issue with the work environment is that the workers get a 1 hour max time to find bugs. If they take longer than that they get a mark against them and may cause them to lose their job. This rewards workers who cheat and just send away the cars within the time constraint.

This is an example of something they want to fix.

They have it better now, until they don't...

Who knows which change in the wind would make Musk change his opinion and make conditions worse (see "I'm a free speech absolutist (until I'm not, and I shut up every voice opposing me)".

With a collective agreement, he can throw as many tantrums he wants and the workers will be protected.

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