Tesla's growing union dispute could morph into a 'brush fire'

• The next union battleground could be Tesla.
• How Tesla responds to labor disputes in Scandinavia could shape talks with UAW.
• The UAW may have more luck at smaller targets before turning full attention to Tesla.

Tesla investors are watching closely to see how Tesla responds to an ongoing labor dispute overseas.

A movement that began with 130 mechanics and 10 Tesla repair workers in Sweden has gained steam across Scandinavia to include groups of employees in Denmark, Finland, and Norway – all countries with very high electric vehicle adoption rates.

As the American car union, the United Auto Workers, eyes expansion in 2024 and beyond, one Tesla analyst says the dispute in Scandinavia could shape what a union drive in the US might look like.

"If Tesla gives into the unions around this ongoing dispute it could create a growing brush fire that eventually gets to the UAW and US into 2024," Wedbush analyst Dan Ives wrote in a recent note to clients.

How Tesla handles this labor dispute, and what it is willing to capitulate to could create an opening for a newly emboldened UAW.

"With the Shawn Fain-led UAW battle vs. Detroit which results in GM, Ford, Stellantis giving into union demands, the next battleground could be Tesla," Ives said. "How Tesla handles it politically speaking/negotiations within Sweden is an important issue for the ramifications down the road Musk & Co. might face with other unions globally in this current climate."

After winning record contracts for workers at Ford, GM, and Jeep-owner Stellantis earlier this year, UAW President Shawn Fain is keen to build on that momentum into next year. At the end of November, the UAW launched a public organizing campaign encouraging thousands of non-union auto workers to sign union cards on the union's website. This massive drive covers nearly 150,000 US auto workers across 13 companies – including Tesla.

The UAW's past organizing push at Tesla in the late 2010s fizzled out after the union was met with an aggressively anti-union culture at Musk's car company and a growing criminal federal investigation stole the attention of union leaders. The UAW has since undergone a series of government-mandated reforms with progressive Fain at the helm.

After the Stand Up Strike at all three Detroit car companies garnered rich contracts for his members, Fain indicated that he was just getting started.

"When we return to the bargaining table in 2028, it won't just be with the Big Three," Fain told members last month, "but with the Big Five or Big Six."

It's likely that the UAW would have more success at smaller targets before organizing Tesla, labor experts have said. Volkswagen, in particular, is ripe for organizing, after a 2019 drive at the Chattanooga, Tennessee factory very narrowly failed.

"This is not your father's, your mother's, or your grandfather's UAW," Art Wheaton, a labor expert at Cornell University, previously told Business Insider. "The more they win at the table, the more they're likely to win in these organizing drives."