Tesla announced on Tuesday that it has increased wages by 4% for all employees at its German gigafactory in Gruenheide, located just outside Berlin, effective from the start of November.
This pay raise follows a significant move last month when the electric car manufacturer confirmed it would transition 500 temporary workers to permanent positions starting November 1. However, Tesla clarified that the decision was made without the involvement of the IG Metall union, which has frequently criticized working conditions at the facility.
Erik Demmler, Tesla’s human resources director, welcomed the wage increase, emphasizing that it was especially timely given the current climate in Germany’s automotive sector. “This is particularly positive news for our workforce, particularly at a time when many of our competitors in the German automotive industry are discussing job cuts and plant closures,” Demmler said.
The Gruenheide site, Tesla’s sole European gigafactory, currently employs approximately 12,000 people. Earlier this year, Tesla implemented voluntary staff reductions and refrained from renewing contracts for certain subcontractors as part of a broader strategy to cut costs. This comes amid broader challenges in the German automotive industry, with Volkswagen, the country’s largest carmaker, launching its own cost-saving initiatives, which include requesting employees to accept a 10% pay cut in exchange for job security.
Tesla’s recent wage increase signals a contrast to the cost-cutting trends seen in other parts of the automotive sector and underscores the company’s commitment to its growing workforce in Germany.
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