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Tesla sues California county in virus factory closure fight, threatens to leave

Published 05/09/2020, 01:52 PM
Updated 05/09/2020, 11:40 PM
© Reuters. FILE PHOTO: Tesla Inc CEO Elon Musk speaks at an opening ceremony for Tesla China-made Model Y program in Shanghai

By Tina Bellon and Sinéad Carew

(Reuters) - Tesla Inc (O:TSLA) sued local authorities in California on Saturday as the electric carmaker pushed to re-open its factory there and Chief Executive Elon Musk threatened to move Tesla's headquarters and future programs from the state to Texas or Nevada.

Musk has been pushing to re-open Tesla's Fremont, California, factory after Alameda County's health department said the carmaker must not reopen because local lockdown measures to curb the spread of the coronavirus remain in effect.

In a blog post on Saturday, Tesla said the county's position left it no choice but to take legal action to ensure Tesla and its employees can go back to work.

The company said it had worked out a thorough return-to-work plan that includes online video training for personnel, work zone partition areas, temperature screening, requirements to wear protective equipment and rigorous cleaning and disinfecting protocols.

The company said it had informed health authorities in Alameda County, where the Fremont factory is located, about its restart plans, but claimed the acting official did not return calls or emails.

Alameda County's Public Health Department, which earlier on Saturday said it had been "communicating directly and working closely with the Tesla team," did not immediately respond to a request for comment.

Tesla filed a lawsuit against the county in San Francisco federal court on Saturday, calling the continued restrictions a "power-grab" by the county since California's governor had said on Thursday that manufacturers in the state would be allowed to reopen.

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The company said Alameda was going against the federal and California constitutions, as well as defying the governor's order, the lawsuit said.

Alameda County is scheduled to remain shut until the end of May, with only essential businesses allowed to reopen. The county said it does not consider Tesla an essential business. County officials did not immediately respond to a request for comment on the lawsuit.

The outspoken Musk also took to Twitter on Saturday to complain and threatened to leave the state.

"If we even retain Fremont manufacturing activity at all, it will be dependen (sp) on how Tesla is treated in the future," he tweeted, referring to the San Francisco Bay area facility that is Tesla's only U.S. vehicle factory.

Alameda County said on Saturday that it has been working with Tesla to develop a safety plan that "allows for reopening while protecting the health and well-being of the thousands of employees" that work at the factory and that it looks forward to coming to an agreement on a safety plan very soon.

Fremont Mayor Lily Mei expressed concern about the potential economic implications of continuing the shelter-in-place order without provisions for manufacturers such as Tesla to resume. Mei on Saturday urged the county to work with businesses on "acceptable guidelines for re-opening."

Musk had told employees on Thursday that limited production would restart at Fremont on Friday afternoon.

Tesla last year built nearly half a million vehicles at the Fremont plant and moving the entire production facility would be a massive undertaking.

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Dan Ives, a Wedbush analyst, on Saturday estimated it could take the company 12 to 18 months to relocate production.

The threat to relocate the facility comes as Tesla aims to ramp up production at Fremont of its Model Y sport utility vehicle, which it expects to generate record demand and profit margins.

Musk, who sparred with California officials in March over whether Tesla had to halt production at Fremont, had criticized the lockdown and stay-at-home orders, calling them a "serious risk" to U.S. business and "unconstitutional."

Tesla shares have risen 127% since March 18, their recent closing low, including a 16.8% gain in the last trading week to close at $819.42 on Friday.

Latest comments

If it was 1% (its quite a bit higher) that could still mean 3.3 million American lives. What if the real rate is 7%... over 23 million? Those numbers seem high - because the lockdown has reduced cases. But without measures those potential numbers are back in play. It seems you could live with that though.
Bull **** you must work for CNN.
I hope Elon challenges the constitutionality of this lockdown in court, most of us can't afford the legal fees. Our civil liberties are sacrosanct.
How much can a worker earn after economy reopen? $25 an hour? How much can he earn if he get infected and died. Totally no income to the family forever. Where as business owner will still make tons of money after he replace u.
I know three people that have been confirmed to have died from COVID-19 and another that is battling very hard. This does not seem like "just a cold", how dare you deny all the (quite obvious) pain and suffering.
No more has died than our usual flu season.
You probably have a greater chance of dying from a lightning strike than covid 19. You dont hide in your house all year round... now do you?
They should leave that communist state
Everytime i read the comments here, i have to question americans attitude... Its a shame that for so many people business is more important than human health. U know, u dont become china by regulating some aspects of your life for the sake of human health. We in europe (most countries at least like here in austria) did the same thing and were able to keep the number low, so that right now, we are opening up again progressively.This is a global crises, deal with it as humans.
how about this the mortality rate of covid 19 is less than 1% . starvation has a mortality rate of 100%. If you don't pay your mortgage you lose your home. to cause total economic collapse because someone might die is just plain stupid. the consequences of staying locked down for much longer will be devastating far beyond covid 19. our massive increase in the federal debt my already bankrupt America. in 1968 we had the Hong Kong flu with 100000 deathsand we had Woodstock, nobody shut down and life goes on. if you lose your home and your car and become permanently unemployed just how are you going to survive?
it is wonderful idea. just do it
Soon may be right about having a legal claim, but is it a good idea to restart the factory?
I thought that California wanted to secede from the USA. They are acting like Iran.
Really? You are comparing Ca to Iran?!?
Yes. Its worse. Live in Palo Alto and just say you are conservative and watch what happens.
California is intolerant to anyone with conservative ideas
Everyone is leaving CA
Thank god for Trump
Ariana sounds like you would happier in Communist China. And then you won't have to write in all caps.
Ariana that's offensive and racist. And you seem so upset.
He is trying to get some money from Ca.
Stay out of texas
I'm surprised California has not tried to put him in jail for running a business. California looks at business owners as ATM machines and as a criminal for trying to make money.
i see more and more people are waking up! fake flu fake media real tyranny real fascism!
snoflk
Less deadly than common cold
They already filed the lawsuit. https://twitter.com/thirdrowtesla/status/1259249196428718081?s=21
https://wholemars.com/alameda-lawsuit.pdf
Another example why I love this guy!
Alameda County staff act like a communist, they better move to China. And live under evil Xi Jin Ping.
Ha! Bullies backing down what a riot!
California is the absolute worst state to run a business in and criminalizes business owners.
 why don't you do the world a favor and phu ck off and d/ie
ata boy Ollie!!
good for him.
What a big baby! This is all about everyone's safety. America will never get clear of this virus with all these conspiracy nuts second-guessing the Intelligent Governors trying to fill the gap Trump left.
Close company open ******business..use homeless crackwho.res
call his bluff
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