March 1, 2024

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Norwegian wealth fund pushes Tesla for union recognition, will retain stake

Norwegian wealth fund pushes Tesla for union recognition, will retain stake

OSLO, Dec 9 (Reuters) – U.S. carmaker Tesla (TSLA.O) must respect basic workers’ rights including collective bargaining, the $1.5 trillion Norwegian sovereign wealth fund said, adding it would retain its stake in the company and seek to influence policy. About time.

The electric car producer is facing a backlash in the Nordic region from unions and some pension funds over its refusal to accept a request from Swedish mechanics for collective bargaining rights covering wages and other conditions.

Norges Bank Investment Management (NBIM), the world’s largest stock market investor and seventh-largest shareholder in Tesla with a 0.88% stake worth $6.8 billion, said on Saturday that it has “no plans” to divest its holdings in the company, unlike some other funds.

“We expect companies in which we invest to respect basic human rights, including labor rights,” NBIM said in a statement to Reuters when asked about Tesla’s conflict with its Swedish workers.

“In 2022, we supported a Tesla shareholder proposal requiring the company to introduce a policy to respect the right to regulate,” she added.

The 2022 proposal, which NBIM said was supported by 32% of those who voted, called on Tesla to adopt a policy of respecting labor rights such as freedom of association and collective bargaining. The company’s Board of Directors recommended a “no” vote.

Tesla, which has revolutionized the electric vehicle market, has managed to avoid collective bargaining agreements with nearly 127,000 workers, and CEO Elon Musk has been vocal about his opposition to unions.

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Tesla did not respond to a request for comment.

The company said its Swedish employees enjoyed conditions as good or better than those demanded by the union.

PensionDanmark, one of Denmark’s largest pension funds, said on Thursday it had disposed of its $69 million holding in Tesla, while fund manager Paedagogernes Pension said it would follow suit and dispose of its $35 million stake.

NBIM said its forecasts are based on international standards set by the International Labor Organization and global conventions on human rights.

NBIM says in its outlook documents that companies in which it invests “should engage with workers and their representatives, such as trade unions” in a transparent manner when developing and implementing policies and practices.

“Watchlist”

Denmark’s AkademikerPension said on Friday it would retain its $18 million stake in Tesla but added that it had kept the automaker on a watch list and expected both parties to reach a satisfactory resolution to the ongoing conflict.

“It seems that Tesla’s management did not occur to them that suitable working conditions create more value and less risk in companies,” said Jens Münch-Holst, CEO of AkademikerPension.

Swedish state pension fund AP1, which held a $187 million stake at the end of June, said maintaining dialogue with Tesla was its preferred course of action rather than selling its shares.

Another Swedish fund, AP4, which has a $114 million stake in Tesla, said the labor dispute did not constitute a basis for exclusion as a shareholding.

The New York State Common Retirement Fund said it has “long been interested” in Tesla’s labor issues.

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“We have submitted numerous shareholder proposals and written letters seeking to improve Tesla’s labor and party policies,” she said in a statement. “Divestment is not a consideration at this time.”

(Additional reporting by Terje Solsvik in Oslo; Additional reporting by Jacob Gronholt Pedersen in Copenhagen, Marie Maness in Stockholm and Jaspreet Singh in Bengaluru; Preparing by Mohammed for the Arabic Bulletin; Preparing by Mohammed for the Arabic Bulletin) Editing by Kirsten Donovan, Elaine Hardcastle and Mark Potter

Our standards: Thomson Reuters Trust Principles.

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