During Musk’s visit Friday, Tesla executives informed workers that the company would raise wages by 4% effective in November for the around 11,000 employees at the German plant, people familiar with the matter said. Tesla will also pay a 1,500 euro bonus in December to offset inflation. Starting in February, Tesla will raise annual wages by an additional 2,500 euros for workers in production.

The wage increases follow heightened tension between Tesla and IG Metall, Germany’s largest labor union, and a separate confrontation with Tesla service center workers in Sweden.