The labor union strike that Tesla, Inc. TSLA is facing started in Sweden in late October but has since spread to Denmark, Finland and Norway. A bullish analyst sees the outcome of the labor union standoff having wider ramifications for the Elon Musk-led company.
What Happened: Tesla is in a “WWE-like standoff throughout Scandinavia,” said Wedbush analyst Daniel Ives in a note. What started off as a strike by 130 mechanics at 10 Tesla repair workshops across a few Swedish cities has now gained steam, he said.
“With Sweden being a heavily unionized country with many in the country part of a union, Tesla challenging the collective agreements around wages in the country is becoming a growing and ‘third rail issue’ in Sweden,” the analyst said. Fifteen unions have now joined the strike in solidarity with IF Metall, he noted.
Tesla is currently handicapped by transporters who are refusing to deliver vehicles and license plates, by union members who are refusing to collect trash from Tesla workshops and by other challenges, the analyst said. These issues have started to manifest in the region, he said, adding that in parts of Scandinavia, some unions are pledging not to unload or transport Tesla vehicles bound for customers in the Swedish market.
See Also: Everything You Need To Know About Tesla Stock
Why It’s Important: Although Tesla’s union battle in Sweden is a contained situation, it is an “important rod issue” for unions globally, Ives said.
“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,” he added.
That said, the analyst is of the view Tesla may not cave in. “We continue to believe it’s very unlikely that unions will have success going after Musk and Tesla in 2024 given its current DNA and anti-union culture,” Ives said.
“If Tesla gives in to the unions around this ongoing dispute it could create a growing brush fire that eventually gets to the UAW and U.S. into 2024,” the analyst said.
“This speaks to why this current dispute and 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,” he added.
Ives maintained an “Outperform” rating and $310 price target for Tesla stock.
Tesla ended Friday’s session up 0.98% at $253.50, according to Benzinga Pro data.
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