Elon Musk threatens to move Tesla out of California
After Alameda County health officials cautioned Tesla against reopening its California car factory yesterday, CEO Elon Musk tweeted today that the company would sue the county and move its headquarters out of state. “Tesla is filing a lawsuit against Alameda County immediately,” Musk said on Twitter. “The unelected & ignorant ‘interim Health Officer’ of Alameda is acting contrary to the Governor, the President, our Constitutional freedoms & just plain common sense!” Musk has been a vocal critic of coronavirus lockdowns, saying at the company’s April 29th earnings call that such restrictions were “fascist” and not democratic. “We are a bit worried about not being able to resume production in the Bay Area, and that should be identified as a serious risk,” Musk said.
Tesla announced plans to resume “limited operations” at its Fremont facility yesterday, which would bring back about 30 percent of its workforce. But officials in Alameda County, where Fremont is located, said yesterday that it was still under a shelter-in-place order and that Tesla didn’t meet its criteria to reopen. “We have not said that it’s appropriate to move forward,” said Erica Pan, Alameda County’s health officer, according to Bloomberg.
California Governor Gavin Newsom said Thursday that state-level guidance allowing manufacturing to resume some production didn’t supersede county-level restrictions. The company had unsuccessfully tried to argue that Tesla’s production should be considered critical infrastructure. The Fremont plant, where Tesla assembles its Model 3, Model S, Model X, and Model Y vehicles, was temporarily closed March 23rd to comply with the shelter-in-place order. Tesla reduced pay for all its US salaried employees as of April 13th and put most hourly workers who can’t work remotely on unpaid furlough. What would happen to the roughly 10,000 workers at the Fremont plant if Tesla were to move operations out of state as Musk tweeted, was unclear.
Both Tesla and Musk settled with the Securities and Exchange Commission in 2018 over Musk’s tweets about taking Tesla private. Then, in 2019, the terms of the settlement were renegotiated. Under the new terms, a company lawyer must approve Musk’s tweets about certain parts of Tesla’s business before Musk sends them. That includes any announcement that would trigger a filing of the form 8-K, which is used for announcing unscheduled material events, to the SEC. As of this writing, Tesla has not filed an 8-K about Musk’s proposed factory move. Tesla and Alameda County did not immediately return requests for comment.