FYI: The Swedish pension fund AP7 has divested its Tesla shares over verified labor rights violations in the United States.
Swedish Pension Fund AP7 Blacklists Tesla
Tesla has recently faced yet another significant divestment after Swedish pension fund AP7 decided to sell its entire stake in the company. The decision, reported initially by Reuters, was driven by verified violations of labor rights in the United States.
A Billion-Dollar Liquidation
AP7’s decision to blacklist Tesla led to the sale of shares valued at approximately $1.36 billion. As of the end of May, when these holdings were liquidated, Tesla constituted about 1% of the AP7 Equity Fund, amounting to roughly 13 billion Swedish crowns. The fund’s total assets were approximately 1,181 billion crowns.
The Dialogues and Decisions
Despite ongoing dialogues with Tesla and collaborative shareholder proposals, AP7 determined that the automaker failed to adequately address labor rights issues. This move is solely based on labor rights concerns and not related to CEO Elon Musk’s political involvement or statements.
Labor Concerns and Legal Challenges
Tesla’s history in the U.S. includes numerous labor lawsuits, some involving accusations of suppressing pro-union activities. For instance, arguments about prohibiting pro-union apparel due to safety concerns have been upheld in court.
Additionally, allegations of racial discrimination at Tesla’s Fremont Factory have arisen. A notable case involved a former contractor, Owen Diaz, initially awarded $137 million, which was later reduced to $15 million by a U.S. District Judge. However, Diaz ultimately settled for an undisclosed amount after rejecting both sums.
Conclusion
AP7’s divestment highlights ongoing concerns about labor rights within the automotive industry, emphasizing the role of ethical practices in investment decisions. For Tesla, this serves as a reminder of the significant impact that non-compliance with labor standards can have on investor confidence.
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William Kouch
Editor of Automotive.fyi
