Tesla sues California county in virus factory closure fight, threatens to leave
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Tina Bellon
4-6 minutes
Tesla Inc (TSLA.O)
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.
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.
FILE
PHOTO: Tesla Inc?s only U.S. vehicle factory is seen in Fremont,
California, U.S., during the global outbreak of the coronavirus disease
(COVID-19), May 8, 2020. REUTERS/Nathan Frandino/File Photo
Tesla
last year built nearly half a million vehicles at the Fremont plant and
moving the entire production facility would be a massive undertaking.
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.
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