Published on November 28th, 2019 | by Steve Hanley0
Tesla’s Long & Winding Road From Palo Alto To Grünheide
November 28th, 2019 by Steve Hanley
Tesla has been looking for a good place to build its first European factory for several years, and has been wooed by any number of local, state, and national governments. So, how did it choose the city of Grünheide in the German state of Brandenburg? An antique 12 passenger Russian Antonov biplane figures prominently in the story, according to the New York Times.
The plane is owned by Jörg Steinbach, the economics minister of Brandenburg. Earlier this year, he took Elon Musk up in the air to view a proposed factory site. Steinbach promised Musk he would get building permits for a new factory in 4 weeks instead of the usual 11 months. To be fair, much of the permitting had already been done for a proposed new BMW factory, which BMW decided to build in Leipzig instead.
Berlin has become a mecca for tech companies, much the way Silicon Valley has in the US. Musk was eager to tap into the Berlin vibe until Steinbach informed him Grünheide was actually located in Brandenburg. There was a long pause, but soon the parties hammered out a 1½ page memorandum of understanding and the deal was done. Tesla says it will establish a design and technology center in Berlin as well.
According to Manager Magazine, the state has already created a task force designed to facilitate coordination between it, the company, and the various ministries to ensure the smoothest possible planning and construction process. The newspaper says the factory will begin manufacturing the Tesla Model Y toward the end of 2021. Elon Musk may have a different time schedule in mind.
Arne Christiani, the mayor of Grünheide, tells the New York Times that city officials want to be as helpful as possible because the the factory will attract workers back to the area at a time when many are being lured to the cities. The site is near the long delayed new Berlin airport. With the first Tesla Model Y vehicles scheduled to begin rolling off the assembly line in 2021, the mayor jokes, “We’ve been making bets on what happens first.”
Be Careful What You Wish For
Brandenburg is not known as a manufacturing center, but the Tesla factory may act as a magnet for other companies. US battery maker Microvast has already decided to locate its new battery factory in Ludwigsfelde, another Brandenburg community. Once again, Jörg Steinbach was instrumental in the decision to locate in Brandenburg, according to Der Tagesspiegel. The timing of its announcement is strictly coincidental. Microvast will not make batteries for Tesla and decided to locate in Ludwigsfelde before Tesla made its announcement.
Microvast claims to make batteries that can be recharged in 15 minutes or less. It will invest more than $100 million in the new factory, which is expected to begin operations in 2021 and eventually employ as many as 250 workers. The Tesla factory will employ up to 3,000 initially, but that number could grow to 7,000 or more in coming years.
Steinbach and the government of Brandenburg should be mindful of the experience of the community surrounding Tesla’s original Gigafactory in Nevada. Tesla began by developing what was basically an unused piece of desert. Its presence has attracted more business to the area, which is just what state and local authorities hoped would happen. But the influx has not been without problems.
Traffic has increased beyond the capacity of the local roads to handle. The demand for schools and firefighters, police, and emergency workers has exploded, straining the ability of the local community to catch up, according to a report by USA Today. Home prices are exploding and taxes are going up rapidly as well.
Working With Unions
Different countries have different cultural norms when it comes to labor and management relations. In Germany, there is a respectful relationship between management and workers. In Zwickau, where Volkswagen is converting an entire factory from making Golf sedans to the new electric ID.3, one assembly line was shut down for 12 weeks for the transition to take place. The workers were sent home but continued to receive their regular pay until they began working on the new assembly line.
As the New York Times points out, “Questions remain, particularly about how Tesla’s high-intensity, 24/7 work ethic will adapt to Germany, where factory managers are expected to consult with employee representatives before making major decisions.” Olivier Höbel, head of the IG Metall union that represents autoworkers in Berlin, Brandenburg, and Saxony, says, “The labor laws are distinctly different here.” But he was quick to add the union will work with Tesla “to create the perfect climate that the project becomes a full success.”
Maybe. The honeymoon may well be sweet, but how long will it last? Tesla has a reputation for being militantly anti-union. Elon Musk is a CleanTechnica-certified genius, but he is used to getting his own way. When he says jump, he expects people to jump and ask how high on the way up. When Tesla purchased Grohmann Engineering a few years back, the founder of that company was pushed overboard rather quickly after the deal was done. It will be interesting to see how long the era of good feeling between Tesla, the union, and local authorities lasts.
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