Tesla increases salaries at German factory by 4%

US car manufacturer Tesla is increasing salaries for employees at its Gigafactory in eastern Germany by 4%.

The company announced on Tuesday that the increase is retroactive to December 1.

“As in previous years, we have implemented this adjustment independently and without union influence. As in previous years, it is based on our promise to our employees to review salaries regularly,” HR manager Erik Demmler said in a statement.

The IG Metall union continues to call for the introduction of a collective agreement at Tesla.

“The pay rise at Tesla is absolutely justified and also necessary; the employees have earned it,” said Jan Otto, district manager of the union. “However, even after this increase, pay at Tesla still lags significantly behind the industry standard in the automotive industry in Germany.”

There is currently no collective agreement at Tesla, and the electric car manufacturer is vehemently opposed to one, causing the relationship between Tesla and the IG Metall union to be tense.

Tesla claims the starting monthly annual salary for production employees after the increase is now around €6,000 (about $7,000), 14.5% more than the collective agreement wage in eastern Germany.

IG Metall believes this comparison is misleading because the two lowest pay grades are not assigned in German automotive plants. It also says the unilateral announcement of wage increases by a company’s management does not replace a collective agreement.

Most recently, for example, the union demanded the payment of a Christmas bonus of at least €1,500.