Tesla prepared to move out of California amid fight over factory shutdown, Musk tweets

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KEY POINTS
  • Elon Musk tweeted on Saturday that he is going to sue Alameda County and move future operations out of California after a dispute over whether the company can reopen its factory there.
  • Musk has been clashing with regulators over local shelter-in-place orders meant to slow the spread of Covid-19.
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SpaceX owner and Tesla CEO Elon Musk gestures during a conversation at the E3 gaming convention in Los Angeles, June 13, 2019.
SpaceX owner and Tesla CEO Elon Musk gestures during a conversation at the E3 gaming convention in Los Angeles, June 13, 2019.

Tesla CEO Elon Musk said on Twitter Saturday that the company is preparing to file a lawsuit against Alameda County and will move its headquarters and future operations out of California.

On Friday, Alameda County’s interim public health officer, Dr. Erica Pan, said that health orders to contain a Covid-19 outbreak in the region are still in place, and that Tesla does not have a “green light,” to resume vehicle production at its main U.S. car plant in Fremont, California, yet. She also noted, “We have been working with them, looking at some of their safety plans, and have had some recommendations.”

Tesla had wanted to start production again on Friday afternoon. The plant is where the company makes vehicles for Europe and North America.  The company’s headquarters are in Palo Alto, not part of Alameda County.

Unlike other automakers, Tesla’s employees are not part of a union, so it would be easier for the company to significantly alter its operations.

Insulting Pan personally, Musk wrote on Twitter:

“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!”

He also claimed that: “Tesla knows far more about what needs to be done to be safe through our Tesla China factory experience than an (unelected) interim junior official in Alameda County.”

Alameda County responded with a statement saying its Health Care Services Agency and Public Health Department have been working closely with Tesla in Fremont on a safety plan. They said they aim for Tesla to reopen while protecting the health of thousands of employees who travel to and from work at the factory.

“We look forward to coming to an agreement on an appropriate safety plan very soon,” the county said without offering specific details on a timeline. “We appreciate that our residents and businesses have made tremendous sacrifices and that together we have been able to save lives and protect community health in our region. We need to continue to work together so those sacrifices don’t go to waste and that we maintain our gains.”

While Musk characterized Pan as “ignorant,” the doctor has deep experience in both public health and infectious diseases.

Among other things, Pan is a graduate of Tufts medical school, completed a residency and fellowship at UCSF and has worked at Alameda County Public Health Department since 2011 while also working as a physician and professor. She previously worked for six years as the Director of Bioterrorism and Infectious Disease Emergencies at San Francisco Public Health Department, according to her resume on LinkedIn.

Previously, the Tesla and SpaceX CEO cursed and called Covid-19 health orders “fascist,” on a Tesla earnings call. He also erroneously stated that children are “essentially immune” to Covid-19, among other controversial tweets about the novel coronavirus and governments’ efforts to deal with the pandemic.

After the provocative string of tweets from Musk on Saturday, Fremont Mayor Lily Mei said in a 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.” She also expressed support for Tesla specifically, and urged the county authorities to “come up with acceptable guidelines,” to help Tesla and others reopen their businesses.

One Fremont based Tesla employee told CNBC workers there don’t know how to feel about Musk’s tweets on Saturday. This person, who asked to remain un-named as they did not have permission to give media interviews, said many Tesla employees would prefer that the CEO would just work with the county, make sure the factory is safe, and reopen as quickly as possible.

Tesla did not reply to a request for further information about its plans to move headquarters out of the state, as Musk said they intend to do.

The SEC previously sued Tesla and Musk after the CEO tweeted that he would take the company private at $420 per share, and had funding secured. The agency said those tweets violated securities laws. As part of the eventual settlement between them, Musk agreed to have his Tesla communications reviewed by in-house counsel or some other so-called Twitter-sitter. It was not clear whether his Saturday tweets were approved by such a point person at Tesla.

Tesla shares have been on a run in 2020 and are up more than 95% for the year.

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