Elon Musk sues, threatens to move Tesla out of California over coronavirus order shutting down Fremont factory

Tesla filed a lawsuit against Alameda County on Saturday for allegedly violating due process by barring the company from making its electric vehicles during the coronavirus outbreak.

“Alameda County’s power grab not only defies the governor’s orders, but offends the federal and California constitution,” the suit claims.

The move comes after CEO Elon Musk lashed out at public health officials Saturday on Twitter, claiming his car company will leave California and threatening to sue the county over coronavirus lockdown orders that have shuttered its Fremont factory.

“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!” Musk tweeted Saturday morning, referring to Health Officer Dr. Erica Pan.

He continued in another tweet, “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 (sic) on how Tesla is treated in the future. Tesla is the last carmaker left in CA.”

Alameda County officials declined to respond directly to Musk’s threats Saturday. Instead, spokeswoman Neetu Balram wrote in a statement that county’s Public Health Department has been working with Tesla in “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 team at Tesla has been responsive to our guidance and recommendations, and we look forward to coming to an agreement on an appropriate safety plan very soon,” Balram said.

Meanwhile, Fremont’s mayor and the Bay Area Council appeared to side with Tesla in calling for the health order to be loosened.

“California and the Bay Area are demonstrating every day that we can protect public health and reopen our economy at the same time,” Jim Wunderman, President and CEO of the Bay Area Council, said in a statement. “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.”

In his barrage of tweets Saturday, Musk, who has 33.9 million Twitter followers, also encouraged Tesla shareholders to file a class-action lawsuit against Alameda County and called its actions “irrational & detached from reality.” He continued to belittle Pan, writing 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.”

It’s the latest development in a now months-long dispute between Tesla and Alameda County health officers over whether the company can keep making cars at the Fremont facility through the shelter-in-place order.

In mid-March, Tesla spent days arguing with the county over whether the car company was considered an essential business under Bay Area shelter-in-place orders instituted on March 16. The company later backed down and suspended operations on March 23.

This week, Alameda County’s public health department shot down a plan Tesla officials had announced to resume operations on Friday.

Musk’s tweets refer to a distinction that confused and frustrated several local businesses as much of California begins emerging from coronavirus lockdowns: While new state rules started allowing certain retail and manufacturing businesses to resume operations on Friday, the guidelines don’t apply in the Bay Area, where more stringent county orders keeping those businesses closed remain in effect.

Tesla officials tried to contend that their company constitutes an “energy distribution” manufacturer, which revised local orders allow to operate. But the county disagreed with that argument.

“If a business does not meet the limited criteria stated in that Order to re-open, then they are out of compliance,” Balram told this news organization Friday. “Tesla has been informed that they do not meet those criteria and must not re-open.”

Tesla officials did not immediately respond Saturday to a request for more information about Musk’s lawsuit and relocation threats.

Musk has in the past downplayed the threat of the coronavirus, which as of Friday had killed 2,627 people in California and more than 70,000 across the country, and railed against sheltering orders that are meant to contain its spread, calling the lockdowns “fascist.”

Fremont Mayor Lily Mei issued a statement Saturday encouraging health officials “to come up with acceptable guidelines for re-opening our local economy.” Musk then thanked Mei for the statement.

“We know many essential businesses have proven they can successfully operate using strict safety and social distancing practices,” Mei said. “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.”

Check back for updates.

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Author: Nico Savidge

Mercury News Business