Elon Musk threatens to move Tesla from California, files suit against Alameda County

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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. Hours later, Tesla’s attorneys filed suit in US District Court in the Northern District of California seeking an injunction against the county’s shelter-in-place order, because it “contradicts the Governor’s Order to the extent it restricts the operation of business operating in the federal critical infrastructure sectors.”

“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 shelter-in-place orders, 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. He also urged supporters on Twitter to “please voice your disagreement as strongly as possible with Alameda County.”

An Alameda County spokesperson said in a statement to The Verge on Saturday that the county Health Care Services Agency and Public Health Department have been “communicating directly and working closely with the Tesla team on the ground in Fremont. This has been 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.”

The spokesperson added that the team at Tesla had been responsive to guidance and recommendations “and we look forward to coming to an agreement on an appropriate safety plan very soon.” The statement, issued several hours after Musk’s tweets, did not reference the Tesla CEO’s comments or mention him by name.

“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,“ the statement continues. “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.”

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 it 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 unsucessfully 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 did not reply to a request for comment.

UPDATE May 9th, 5:16PM ET: Adds statement from Alameda County spokesperson and includes additional tweet from Musk.

UPDATE May 9th, 5:40PM ET: Adds details of Tesla lawsuit filed against Alameda County

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