Kyle Grillot/Reuters

Several American companies that have opened up businesses in Germany have consistently encountered problems with German labor laws and its work culture.

Experts believe that Tesla, which announced Tuesday that it’s opening up a new Gigafactory in Berlin, will encounter similar problems.

The car manufacturing company has already had several complaints about its work environment in the past, and experts believe that if this continues in Germany, the site will be shut down.

Other problems the American company could face are cultural miscommunication and language barriers.

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When Elon Musk announced at an award ceremony in Berlin on Tuesday that he would open the next Tesla Gigafactory in Brandenburg, it could have been just another one of his many claims.

After all, anyone who knows Musk knows that the Tesla CEO often likes making impulsive statements. If one were to take everything that Musk said seriously, Tesla would no longer be listed on the stock exchange, would have delivered 500,000 cars last year, and would have already made all of its vehicles fully autonomous.

But Musk’s announcement about his new project in Germany was proven to be true after the first job advertisements for the Gigafactory were posted online. How impulsive this decision was for the Tesla CEO will only become apparent in the coming years. But any US company opening up a business in Germany should be aware that Brandenburg has very different laws compared to Nevada.

American companies in Germany have a poor track record

The list of US companies that have had problems with German regulations and labor laws is long.

The most prominent example is when the Amazon had to learn the hard way after poorly-paid temporary workers and poor working conditions resulted in the labor union being called in as well as widespread condemnation of the company.

Tesla employee AP

In 2006, the US retail giant Walmart had to pull out of Germany because it failed to recognize regulations around labor groups, working on Sundays, holiday entitlements, and sick leave.

„There are countless regulations in Germany that companies from the US are not used to,“ Rainer Beekes told Business Insider in an interview.

Beekes runs Global Cultures, a center for intercultural communication that advises companies looking to set up their business abroad. Before that, Beekes held management positions at multinational companies such as Volkswagen and American Express.

„I often received little understanding from my American bosses when I sent someone home after a ten-hour working day simply because I had to,“ Beekes said.

So, will Elon Musk empathize? Especially considering his background on working conditions in the Gigafactory in Nevada, which have now become notorious: 70-hour weeks, queues in front of the toilet, production in tents. All this would not be possible in Brandenburg, at least not for long.

„US companies often come with the attitude that they are the top of the world,“ says Uta Kremer, who teaches intercultural communication at Zwickau University in Western Saxony. „I would imagine Elon Musk has the same arrogant attitude. But what happens in the US isn’t automatically possible here — it doesn’t matter whether it’s about notice periods or working on weekends.“

A difference in work culture

In addition, Kremer mentions a second aspect that often leads to differences that are difficult to bridge: culture. For example, the stark differences between American and German ways of communicating with colleagues and employees can make cooperation more difficult.

It was precisely these problems that ultimately led to the failure of the merger of Daimler and Chrysler. „The Chrysler managers considered their German colleagues to be rude, but according to German understanding they were simply being direct,“ Kremer said.

The feedback culture in Germany is very different, she added. Germans praise less, but are much more open to criticism, while in the US, criticism is often much more subtle and hidden within praise.

DaimlerChrysler’s „failed marriage“ at the beginning of the 2000s is still regarded today as a symbol of irreconcilable cultural differences between the US and Germany. Chrysler wanted Daimler to become more flexible, agile and faster. Daimler wanted Chrysler to pay more attention to quality and engineering.

Judith Geiß, whose job it is to advise companies and individuals cooperating with US partners, predicts it is exactly these differences that will be difficult for Tesla.

„Tesla likes to experiment, which could be difficult to match with the thoroughness of German engineering,“ Geiß said.

In general, Beekes believes that Germans deal differently with project planning. Germans don’t just „get started on a project‘ and instead value thorough planning.

„We want to avoid uncertainty, and commit ourselves to a long planning phase,“ Beekes said. Americans are more „hands-on,“ as Beekes calls it. „And if something goes wrong, they do it differently. But Germans don’t want to make any mistakes in the first place.“

Musk has to expect language barriers

Geiß also mentions another, completely underrated reason why Tesla could struggle in Brandenburg: „Tesla cannot assume that all employees speak perfect English. „

The company would be well-advised not to simply send a manager from the US, but to use German managers instead. English lessons for employees would also be helpful. „The lack of English is the easiest part to fix, but not many companies try to change that.“

Nevertheless, the experts agree that Tesla’s plan in Brandenburg is not necessarily doomed.

„Tesla is coming to Germany in a positive market environment. The e-mobility sector is growing. And if the market is good, then communication will also be easier for multinational companies,“ Beekes said.

Geiß also sees an opportunity in Brandenburg: „Tesla can establish e-mobility more strongly in Germany and get to know German customers better, but can also learn from Germany. In this respect, the location in Brandenburg is more than just a factory, but rather a competence center.“