In Sweden, the innate suspicion towards organised labour of a US tech entrepreneur has collided with Europe’s social model. The Swedish IF Metall union is in an escalating battle with Elon Musk’s Tesla over the carmaker’s refusal to sign a collective bargaining agreement, where employers and unions set labour conditions. The dispute has already spread to dockworkers in Norway and Denmark. Its implications for Tesla, unions and the auto industry stretch across Europe, and back home to the US.

Under the Nordic labour model that Sweden typifies, unions and employer organisations jointly set wages and working conditions in most companies at national level; the government does not intervene. Both sides tend to agree this has kept strikes down compared with, say, France. The unions see collective agreements as especially vital in a nation with no minimum wage.

A wrinkle here is that many small companies in Sweden are not part of collective bargaining agreements — and despite its global clout and renown, Tesla’s labour presence in the country, where it has no manufacturing, is relatively tiny. Only about 130 mechanics in Tesla workshops are involved in the dispute. That has led to some sympathy for the US automaker in Swedish business circles, especially given the unions’ hardball tactics.