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Country's biggest union joins labour dispute against Tesla

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Unions see the fight as vital to protect labour model

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Tesla and Musk refuse to sign collective agreements

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Unionen may escalate efforts if action is circumvented

(Adds union comments in paragraph 12-13)

By Marie Mannes

STOCKHOLM, May 14 (Reuters) - Sweden's biggest union on

Tuesday threw its weight behind a six-month-old strike by

mechanics at Tesla, escalating the U.S. carmaker's

latest dispute with organised labour.

At the heart of the strike is Tesla CEO Elon Musk's refusal

to sign a collective bargaining agreement allowing the metal

workers' union to negotiate deals for the workforce as a whole.

Last month, Musk said the labour storm had passed in the

country where Tesla's Model Y is the top-selling car, but he was

contradicted by IF Metall, which said its strike continued.

The union told Reuters that about 44 of its members -

roughly a third of Tesla's Swedish mechanics - had downed tools

at the company, which does not produce vehicles in Sweden but

services them locally.

"The strike is ongoing and we have no signs of reaching an

agreement in the near future," IF Metall head Marie Nilsson

said. "We have had a few sittings with the Swedish management

during April, but ... Tesla has shown little willingness in

discussing an end to the conflict."

More than a dozen unions have launched action in support of

IF Metall, with Unionen the latest and biggest.

"It is fundamentally important to protect our collective

agreement system," Martin Wastfeldt, head of negotiations at

Unionen, told Reuters.

Unionen began a blockade on Tuesday affecting all work for

Tesla at DEKRA Industrial AB, which conducts equipment

inspections.

If Tesla seeks to circumvent the blockade by hiring other

providers, Wastfeldt said Unionen was prepared to do more.

This might involve Unionen members at the company that

produces licence plates for Tesla in Sweden, or administrative,

human resources and finance staff at Tesla itself.

Access to licence plates has been one focal point of

tensions, with Tesla suing unions that have sought to halt

postal service to the automaker.

On Tuesday, the union for Service and Communication

employees, Seko, said it was taking steps to close a loophole in

the blockade being used by Tesla.

Tesla did not immediately respond to a request for comment

on the strike. It has previously said its Swedish employees have

as good, or better, terms than those the union is demanding.

The conflict is key for the company, whose tough stance

globally on unions could be undermined if it buckles in Sweden,

or if the strike spreads to bigger markets like Germany.

WAR CHEST

While the numbers on strike in Sweden are small, the stakes

are high.

Allowing companies to operate in Sweden without collective

agreements would undermine unions and threaten the Swedish

social model, potentially dragging in the government.

"For IF Metall, it is very important not to lose. They

simply cannot do that," trade union expert Anders Kjellberg

said.

Sweden's unions take heart from past successes - Unionen

signed up payment services group Klarna to a collective

agreement last year - and their firepower, with more than 10

billion crowns ($921 million) in IF Metall's strike fund alone.

But while union action has caused some disruption, Tesla's

new vehicle registrations in Sweden have broadly kept pace with

the market.

Since February, Tesla has brought in about 25 temporary

staff from other European countries, some for multiple

short-term stays.

While it is unclear whether this is linked to the strike, it

contrasts with the previous year, when no such workers were

brought in, a review of labour registrations showed. Tesla did

not respond to a request to clarify.

Kjellberg noted some possible ways out of the impasse.

Amazon ( AMZN ), for example, has a third-party company

manage its Swedish warehouses signed up to collective

agreements, allowing the U.S parent company to avoid doing so.

"It could last for months or even years, because IF Metall

can't give up," Kjellberg said. "But in time, it is possible

both parties will want to find a solution."

($1 = 10.8617 Swedish crowns)