FREMONT (CBS SF/AP/BCN) — Tesla founder Elon Musk took to social media Saturday, posting that the automaker was headed to court to force the reopening of its Fremont assembly plant and threatening to move the operation out of California.
The battle between Musk and Alameda County officials has been simmering since March when a restrictive stay-at-home order was put into place. After keeping the doors of the plant open for a few days, claiming Tesla was an essential business and allowed to remain open under the mandate, Musk closed the facility when the Alameda County Sheriff’s Department threatened to take action.
On Saturday, Musk fired off a series of tweets, pronouncing the company’s next move.
“Tesla is filing a lawsuit against Alameda County immediately,” the first Twitter post read. “The unelected & ignorant “Interim Health Officer” of Alameda is acting contrary to the Governor, the President, our Constitutional freedoms & just plain common sense! — Elon Musk @elonmusk
He followed with “Frankly, this is the final straw. 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 dependen on how Tesla is treated in the future. Tesla is the last carmaker left in CA. ”
Tesla is filing a lawsuit against Alameda County immediately. The unelected & ignorant “Interim Health Officer” of Alameda is acting contrary to the Governor, the President, our Constitutional freedoms & just plain common sense!
— Elon Musk (@elonmusk) May 9, 2020
Hours later, Tesla attorneys sent out a copy of the lawsuit — Click to read the legal filing.
Musk’s twitter outburst, lawsuit and threat to relocate drew reaction from local officials.
“California and the Bay Area are demonstrating every day that we can protect public health and reopen our economy at the same time,” said Jim Wunderman, President and CEO of the Bay Area Council. “We strongly urge Alameda County public health officials to work with Tesla and other employers in figuring out a plan that can allow them to safely resume operations sooner rather than later.”
“We must send a strong signal to businesses and the millions of workers who have lost their jobs that the Bay Area and California are just as eager to restart our economy and get people back to work as we are to stamp out this pandemic.”
Fremont Mayor Lily Mei issued the following statement:
“As the local shelter-in-place order continues without provisions for major manufacturing activity, such as Tesla, to resume, I am growing concerned about the potential implications for our regional economy,” Mei said. “We know many essential businesses have proven they can successfully operate using strict safety and social distancing practices. I strongly believe these same practices could be possible for other manufacturing businesses, especially those that are so critical to our employment base. The City encourages the County to engage with our local businesses to come up with acceptable guidelines for re-opening our local economy. ”
Musk has been an early and frequent critic of the shelter-in-place order.
“I would call it, ‘forcibly imprisoning people in their homes’ against all their Constitutional rights, in my opinion, and breaking people’s freedoms in ways that are horrible and wrong and not why people came to America or built this country,” Musk tweeted on April 30. “It’s an outrage.”
“Give people back their g—–n freedom,” he added.
The county’s health department issued a statement Saturday afternoon, saying that it had been working closely with Tesla in a “collaborative, good faith effort to develop and implement a safety plan that allows for reopening while protecting the health and well-being of the thousands of employees who travel to and from work at Tesla’s factory.”
Although the department didn’t announce lifting restrictions, the statement said “we look forward to coming to an agreement on an appropriate safety plan very soon.”
The department said many businesses and residents had made sacrifices to protect community health. “It is our collective responsibility to move through the phases of reopening and loosening the restrictions of the Shelter-in-Place Order in the safest way possible, guided by data and science.”
Fremont’s mayor on Saturday issued a statement urging county officials to work with businesses, seeming to support Musk.
“As the local shelter-in-place order continues without provisions for major manufacturing activity, such as Tesla, to resume, I am growing concerned about the potential implications for our regional economy,” said Fremont mayor Lily Mei.
“We know many essential businesses have proven they can successfully operate using strict safety and social distancing practices. I strongly believe these same practices could be possible for other manufacturing businesses, especially those that are so critical to our employment base.”
Mei said she wanted to the county to engage with local businesses and come up with ways to reopen.
“As we have done for over a decade, the city is prepared to support Tesla as soon as they are able to resume automobile manufacturing operations and are committed to a thoughtful, balanced approach to this effort that remains safe for our Fremont community,” Mei said.
Tesla employs at least 14,000 workers in the region and the idea of taking those jobs away worries Alameda County District 1 supervisor Scott Haggerty.
“I brought Tesla to Fremont,” Haggerty told KPIX. “I brought it to Alameda County. I worked with them when they were looking for a plant. So, last thing I would want to see in my last year of office is to see that plant close. It would be devastating to me.”
Haggerty said public health officials have been working hard with Tesla in recent weeks to develop a safety plan so Tesla can reopen on May 18.
“We have to do it methodical and we have to do it safe,” Haggerty said. “If Tesla did close the plant, it would be devastating to the city of Fremont.”
Despite Musk’s threat, it would be costly and difficult to quickly shift production from Fremont to Texas or Nevada. The Fremont facility, which was formerly run jointly by General Motors and Toyota, currently is Tesla’s only U.S. vehicle assembly plant and the company would lose critical production if it shut the plant down to move equipment.
“Moving away from Fremont would take at least 12 to 18 months and could add risk to the manufacturing and logistics process in the meantime,” Wedbush Securities analyst Daniel Ives wrote in a note to investors.
But Musk plans another U.S. factory to increase output, possibly in Texas, and could move production once that plant is up and running.
The lack of production in Fremont cuts off Tesla’s revenue and is a big financial strain. On a conference call last month, Musk said the company only has assembly plants in Fremont and Shanghai, and the Fremont facility produces the majority of its vehicles. He called the closure of Fremont a “serious risk.”
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In an e-mail sent Thursday night, Musk called 30 percent of the Tesla Fremont factory workforce back to the plant to start making cars, saying Gov. Gavin Newsom’s order permitted it.
The problem? The governor said that local orders, such as those in Bay Area counties pushing the lockdown easing to May 31, can supersede the state order.
“Based upon conditions on the ground … I want to thank the local health directors in the Bay Area for doing what they think is right for their communities,” Newsom said in a news conference Friday.
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That was backed up by the Alameda County public health department which issued this statement, saying the electric car maker is out of compliance.
“Tesla has been informed that they do not meet those criteria and must not reopen. We welcome Tesla’s proactive work on a reopening plan so that once they they fit the criteria to reopen they can do so in a way that protects their employees and the community at large,” Neetu Balram said in a statement.
Silicon Valley observers aren’t surprised Musk’s company tried to dodge the rules.
“He’s a guy who flaunts (sic) authority. He’s done that his entire career. He’s done it with his own board. This is Mr. Musk playing according to type,” said Russell Hancock, president and CEO of Joint Venture Silicon Valley.
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