Tesla Sues Californian County, Threats To Move HQ

Tesla’s boss Elon Musk has effectively declared war on local county authorities after they refused to allow production to restart at its giant factory in Fremont, California.

Last Thursday Musk had sent an email to Tesla’s workforce saying that the car maker would restart limited production at its Fremont factory, possibly as soon as last Friday.

However that move potentially put Tesla on a collision course with health and state officials, as California Governor Gavin Newsom had said he would allow production to resume in factories in some parts of the state that are producing essential goods.

Fremont factory

Tesla’s Fremont factory is located in Alameda County in California, near to San Francisco.

But late last week 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.

“Tesla is the last major carmaker remaining in California, and the largest manufacturing employer in the State with more than 10,000 employees at our Fremont factory and 20,000 statewide,” Tesla wrote. “We understand the impacts Covid-19 has caused and have a responsibility to look out for the livelihoods and safety of our personnel, many of whom rely on us and have been out of work for weeks due to the impacts of shelter-in-place orders.”

“Given the Governor’s recent guidance, which is supported by science and credible health data, the state and federal government’s classification of vehicle manufacturing as national critical infrastructure, and our robust safety plan, Tesla has started the process of resuming operations,” it said.

Tesla lawsuit

The company said it had worked out a detailed 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.

Tesla said it contacted health authorities in Alameda County about its restart plans, but alleged the acting official did not return calls or emails.

Alameda County is scheduled to remain shut until the end of May, with only essential businesses allowed to reopen. The county has previously said it does not consider Tesla an essential business.

“Contrary to the Governor’s recent guidance and support from the City of Fremont, Alameda County is insisting we should not resume operations,” said Tesla. “Unfortunately, the County Public Health Officer who is making these decisions has not returned our calls or emails.”

“We will continue to put people back to work in a safe and responsible manner,” said Tesla. “However, the County’s position left us no choice but to take legal action to ensure that Tesla and its employees can get back to work. We filed a lawsuit on May 9 asking the court to invalidate the County Orders, to the extent the County claims they prevent Tesla from resuming operations.”

Tesla filed the lawsuit against the county in San Francisco federal court on Saturday.

Headquarters move

Tesla it should be remembered had resisted shutdown orders in California as long as it could, only shutting down its main Fremont factory to the south of San Francisco on 18 March when ordered to do so.

The firm also shut down factories in New York that were making solar roof tiles.

On 7 April Tesla told employees it would furlough all non-essential workers and implemented salary cuts.

The shutdown has been intensively frustrating for Tesla CEO Elon Musk, who recently slammed the California lockdown and called it ‘fascist’ and ‘not democratic’, and said that authorities were effectively imprisoning people in their own homes.

“To say that they cannot leave their house and they will be arrested if they do, this is fascist,” said Musk. “This is not democratic, this is not freedom. Give people back their goddamn freedom!”

Now with Alameda refusing to allow Musk to re-open the factory, he has threatened to move the firm out of California.

“Tesla is filing a lawsuit against Alameda County immediately,” Musk tweeted. “The unelected & ignorant ‘Interim Health Officer’ of Alameda is acting contrary to the Governor, the President, our Constitutional freedoms & just plain common sense!”

Musk pointed out that factories in San Joaquin County, right next door to Alameda, have been operational all this time.

“Frankly, this is the final straw,” Musk tweeted. “Tesla will now move its HQ and future programs to Texas/Nevada immediately. If we even retain Fremont manufacturing activity at all, it will be depend on how Tesla is treated in the future. Tesla is the last carmaker left in CA.”

It should be remembered that Tesla last year built nearly half a million vehicles at the Fremont plant. Moving the entire factory would be a massive undertaking.

Share volatility

Tesla’s shares have surged 68 percent this year, spurring Musk to recently remark on Twitter that the company’s “stock price is too high”.

Investors promptly drove the shares about 10 percent lower, wiping $14 billion (£11bn) off the company’s market value, although it recovered most of those losses at the start of last week.

Musk has also revealed he planned to sell “almost all” of his physical possessions and would “own no house”.

The previous weekend Musk did indeed put two of his Bel Air homes on the market for a combined $39.5m, according to property listings service Zillow.

However, Musk owns a further three houses in Bel Air, with all five overlooking the Bel-Air Country Club.

Last week Tesla has applied for a licence to generate and supply electricity in the UK.

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