Tesla’s California plant reopens despite shutdown order, Elon Musk dares county to arrest him

Tesla’s California plant reopens despite shutdown order, Elon Musk dares county to arrest him

11 May    Finance News

Tesla Inc. escalated a showdown with local health authorities and reopened its Fremont, Calif., car-making plant beyond minimal operations.

Chief Executive Elon Musk earlier Monday vowed on Twitter to reopen the plant, Tesla’s TSLA, -0.99% sole U.S. car-making facility, in defiance of a regional shutdown order to curb the spread of the coronavirus.

The plant is located in Alameda County, one of the six San Francisco Bay Area counties under a regional shelter-in-place order set to expire May 31.

County health authorities said in a statement late Monday they have learned the plant has reopened beyond basic maintenance, and that they have notified Tesla it could only maintain minimal operations until an approved plan is in place.

It was unclear whether Tesla would suffer any consequences for reopening without a plan in place.

A spokesperson with the Alameda County Sheriff’s Office had declined to comment on Monday, and neither Tesla nor the Fremont Police Department immediately responded to requests for comment.

In their statement, Alameda County officials said they were “closer” to an agreed-upon plan and Tesla is to submit its proposal later on Monday.

“We look forward to reviewing Tesla’s plan and coming to agreement on protocol and a timeline to reopen safely,” the county officials said.

In the past few days, Musk has intensified his criticism of the regional order.

He tweeted Saturday that he will move Tesla’s factory and headquarters out of California, and hours later Tesla made good on his threat to sue Alameda County, calling the local shutdown order a “power grab.” and seeking an injunction to reopen the plant.

Musk and Tesla are “putting major pressure on Alameda County” to reopen the factory and “Musk is not just talking the talk but walking the walk,” Wedbush analyst Dan Ives said in a note Monday.

Moving away from the California car-making factory would take at least 12 months to 18 months “and could add risk to the manufacturing and logistics process in the meantime,” Ives said.

On a blog post titled “Getting Back to Work,” Tesla on Saturday said it was preparing to resume operations with certain modifications in place and saying it had shared the plan with local authorities. Fremont and Tesla’s battery factory in New York state have been shuttered since late March.

The Fremont factory employs more than 10,000 people. The plant was a General Motors Co. GM, -4.72% facility for 20 years until 1982, and home to a GM and Toyota Motor Co. TM, +0.42% partnership until 2009.

Tesla bought the facility in 2010 and “extensively remodeled it” before the first Model S sedan rolled off the line in June 2012, Tesla says on its web site.

Musk has railed against shutdown orders on Twitter and, more unusually, during a conference call with analysts to discuss Tesla’s first-quarter results last month.

At the time, Musk called the orders “fascist.”

The local health authorities on Friday had foiled Tesla’s plans to start reopening the factory, saying that their own shutdown orders trumped the fact that some nonessential businesses are reopening elsewhere in the state.

Tesla shares have gained 239% in the past 12 months, compared with gains around 1.7% for the S&P 500 index SPX, +0.01% .

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