Tesla files suit over Alameda County's coronavirus restrictions, Elon Musk threatens to move headquarters out of California

ByCornell Barnard & Kayla Galloway KGO logo

Sunday, May 10, 2020

Tesla sues Alameda Co. over COVID-19 restrictions, Musk threatens to move HQ out of CA

Tesla CEO Elon Musk said on Twitter Saturday morning his company will be suing Alameda County over the coronavirus restrictions that are prohibiting certain businesses and manufacturing facilities from resuming operations amid the coronavirus pandemic.

FREMONT, Calif. (KGO) -- Tesla CEO Elon Musk is threatening to pull the company's factory and is suing local officials over reopening an electric vehicle plant. Musk said on Twitter Saturday morning his company will file suit against Alameda County over the public health order that is prohibiting certain Bay Area businesses and manufacturing facilities, including Tesla, from resuming operations amid the novel coronavirus pandemic.

Musk cites Gov. Gavin Newsom's order to begin Phase 2 of reopening California and says Alameda County is "acting contrary to the Governor, the President, our Constitutional freedoms & just plain common sense!"

Tesla's factory is located in Fremont, and in Musk's latest series of tweets, the CEO threatened to move operations out of California, to Texas and Nevada, because of the county's order.

"Frankly, this is the final straw. Tesla will now move its HQ and future programs to Texas/Nevada immediately. If we even retain Fremont manufacturing activity at all, it will be dependen on how Tesla is treated in the future. Tesla is the last carmaker left in CA," Musk wrote on Twitter.

Alameda County is one of six Bay Area counties with stricter guidelines in place than the statewide order, which permitted the reopening of certain businesses and manufacturing in California as of Friday.

On Friday, Bloomberg reported the CEO was preparing to open the Fremont plant in defiance of the county's order.

The factory has been closed for seven weeks.

Musk originally went against orders from the county and tried to remain open when the shelter order first began in the Bay Area, but eventually gave into pressure from the county and shut down the plant.

Alameda County in a statement confirmed Friday that Tesla cannot open under the current health order.

"All businesses within the County must comply with the May 4th Health Officer Order and if a business does not meet the limited criteria stated in that Order to reopen, then they are out of compliance. Tesla has been informed that they do not meet those criteria and must not reopen. We welcome Tesla's proactive work on a reopening plan so that once they fit the criteria to reopen, they can do so in a way that protects their employees and the community at large," an Alameda County spokesperson told ABC7 on Friday.

The county said Saturday communication with Tesla "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."

Fremont's mayor responded to Saturday's developments, encouraging the county to work with businesses to reopen the economy.

In a statement, Mayor Lily Mei said in part, "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. We know many essential businesses have proven they can successfully operate using strict safety and social distancing practices. I strongly believe these same practices could be possible for other manufacturing businesses, especially those that are so critical to our employment base."

The mayor also said the city is committed to a "balanced approach" to resuming operation.

"The City encourages the County to engage with our local businesses to come up with acceptable guidelines for re-opening our local economy. As we have done for over a decade, the City is prepared to support Tesla as soon as they are able to resume automobile manufacturing operations and are committed to a thoughtful, balanced approach to this effort that remains safe for our Fremont community," she said.

Under Phase 2 of Newsom's reopening plan for California during the COVID-19 pandemic, certain retail businesses are able to open with safety and hygiene protocols. Phase 2 also includes logistic and manufacturing facilities.

Six Bay Area counties and the city of Berkeley have opted to take the more cautious route to reopening and are not moving forward with the governor's phase.

In San Francisco, Mayor London Breed said this week that some retail stores may open for curbside sales as soon as May 18.

The other counties remain under the revised shelter-in-place order that took effect May 4.

That order in Alameda, Contra Costa, Marin, San Francisco, San Mateo and Santa Clara counties and Berkeley, does not allow for retail business to resume at non-essential stores. It does, however, loosen restrictions on construction and outdoor activities and sales.

The more restrictive order, whether from a city, county or state, is the one that takes precedence in California -- and in the case of Tesla, the order in Alameda County would supersede the governor.

Later on in his series of tweets Saturday morning, Musk said San Joaquin County in Central California, where Tesla has other facilities, "has been sensible & reasonable, whereas Alameda has been irrational & detached from reality."

Palo Alto's Mayor Adian Fine resonded to the Tesla CEO through Twitter saying, 'I would be really sad and disappointed if @Tesla left @cityofpaloalto, and stand ready to help. I truly appreciate having a cutting edge company based here, employing people, paying taxes, and helping to solve the climate crisis. Happy to help @Elonmusk'

The San Francisco Bay Area released a statement in response to Musk's tweets:

"California and the Bay Area are demonstrating every day that we can protect public health and reopen our economy at the same time," said Jim Wunderman, President and CEO of the Bay Area Council. "We strongly urge Alameda County public health officials to work with Tesla and other employers in figuring out a plan that can allow them to safely resume operations sooner rather than later. We must send a strong signal to businesses and the millions of workers who have lost their jobs that the Bay Area and California are just as eager to restart our economy and get people back to work as we are to stamp out this pandemic. The economic pain from this shutdown is historic, profound and intense, and is taking a huge toll on state and local government budgets that is going to reverberate for years to come. California has already signaled by moving to Stage 2 that the difficult actions we've taken to combat COVID-19 are working, and we're confident that Alameda County can follow the same path."

Tesla's factory in Fremont has more than 10,000 employees, according to the company and is located 45000 Fremont Boulevard.

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