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This week we look at the ongoing union labor disputes in the United States’ autos industry after Tesla and VM Manufacturing were found to have violated labor laws by discouraging workers from unionizing. And in today’s ESG Spotlight: will artificial snow in Italy’s mountains save its winter tourism industry or just delay the inevitable effects of global warming?

A U.S. appeals court said Tesla CEO Elon Musk violated federal labor law by tweeting that employees of the electric vehicle maker would lose stock options if they joined a union.

The New Orleans-based 5th U.S. Circuit Court of Appeals upheld a decision by the U.S. National Labor Relations Board that said the 2018 tweet  amounted to an unlawful threat that could discourage unionizing and ordered Musk to delete it.

Amid an organizing campaign at Tesla’s Fremont, California, plant by the United Auto Workers (UAW) union, Musk tweeted: “Nothing stopping Tesla team at our car plant from voting union … But why pay union dues & give up stock options for nothing?” Tesla did not immediately respond to a request for comment.

Tesla CEO Elon Musk and his security detail depart the company’s local office in Washington, U.S. January 27, 2023. REUTERS/Jonathan Ernst

In the case, Tesla had argued that the tweet about unionizing was not a threat and merely reflected the fact that union workers at other auto companies did not receive stock options. But a three-judge panel of the 5th Circuit disagreed.

“Substantial evidence supports the NLRB’s conclusion that the tweet is an implied threat to end stock options as retaliation for unionization,” the 5th Circuit panel wrote.

But it’s not just Tesla under scrutiny.

The U.S. and Mexico announced a deal to resolve a U.S. labor complaint at VU Manufacturing in northern Mexico that requires the auto parts plant to let workers freely choose their union in line with a trade pact aimed at improving labor rights.

Mexico’s government previously found “serious irregularities” at the factory violating the 2020 United States-Mexico-Canada Agreement (USMCA), the second probe into the plant at the request of the U.S. following worker complaints.

Mexico has now agreed to start sanctions proceedings against VU Manufacturing and ensure the firm takes “appropriate action” against human resource personnel who violated worker rights, the accord said.

“The new management must affirm … its willingness to dialogue with all the unions without discrimination or favoritism,” said the agreement published on the U.S. Trade Representative’s website. VU Manufacturing, an unlisted Michigan-based company, did not immediately respond to a request for comment.

Workers who recently formed a new union, La Liga, said VU Manufacturing management in the border city of Piedras Negras had repeatedly stalled the union’s efforts to establish the plant’s first collective contract, which would include a salary increase, and intimidated and harassed union supporters.

The union litigation comes as membership in the United Auto Workers union rose 3% in 2022 to 383,000 as it works to organize workers in battery plants and other electric vehicle components.

Last month, Shawn Fain won a closely contested race against incumbent Ray Curry for UAW president by fewer than 500 votes out of about 140,000 cast. Fain said last week the union was ready to go to war against “employers who refuse to give our members their fair share.”

Edouard Kouame Kouadio, a farmer cuts a cocoa pod with a machete at his cocoa farm in Gabeadji village, San Pedro, Ivory Coast January 31, 2023. REUTERS/Ange Aboa

Hebah Kassem, director of the living economy program at the U.S.-based environmental NGO Sierra Club, shares her thoughts on supply chain issues in the autos industry:

“Auto manufacturers must be held accountable to not only deliver zero-emission vehicles but also to ensure that their supply chains respect human rights, protect the environment, utilize more recycled materials, and adopt fossil free manufacturing processes and practices.

“The Lead the Charge’s Leaderboard reveals the progress the auto industry has made — and how far we urgently have to go.

“Automakers and their suppliers must avoid continuing the harms of the fossil fuel industry and instead chart a new course toward socially and environmentally sustainable supply chains.”

Breakingviews: Workers are striking and demanding salary hikes to make up for higher living costs. Governments and central banks are warning about the risks of a consumer price spiral, but after three years of real wage stagnation, further restraint will inflict political and economic pain. Subscribe or register for a 90-day free trial to read on.

Skiers ride on an artificial snow slope as end of the ski season nears in Monte Cimone, Italy, March 31, 2023. REUTERS/Claudia Greco

Today’s ESG Spotlight takes us to Monte Cimone, a popular ski resort in Italy’s Apennine Mountains, which invested 5 million euros ($5.46 million) in artificial snowmaking before the winter season in an attempt to stave off the impact of global warming. The money was largely wasted. Elsewhere, some countries are aiming to transform piles of mine waste and by-products into rare earths vital for the green energy revolution.

The snow cannon proved useless because the water droplets they fire into the air need freezing weather for them to fall to the ground as snow, and until mid-January the temperature never fell below zero Celsius (32 Fahrenheit). Some economists and climatologists argue that trying to keep low-altitude ski resorts in business is destined to fail, and snow-making merely delays the inevitable.

“Even if artificial snow can reduce the financial losses from occasional instances of snow-deficient winters, it cannot protect against systemic long-term (climate) trends,” Bank of Italy researchers said in a report in December.

One of two iron ore mines owned by LKAB where rare earths will be extracted in coming years, in Malmberget, Sweden March 23, 2012. Frederick Alm/Handout via REUTERS

Meanwhile, Sweden, South Africa and Australia are at the forefront of a push to transform piles of mine waste and by-products into rare earths vital for the green energy revolution, hoping to substantially cut dependence on Chinese supply.

Prices of the minerals used in products from electric cars to wind turbines have been strong, and a rush to meet net-zero carbon targets is expected to further boost demand. Six advanced projects outside China, including one operated by Swedish iron ore miner LKAB, are now being developed to extract the materials from mining debris or by-products.

“A transition to truly clean cars means ditching not only the tailpipe but also the often dirty, abuse-ridden supply chains that came with it.”

Julia Pioliscanova, senior director vehicle and e-mobility at the European Federation for Transport and Environment

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