An aerial view of Tesla's plant in Fremont on May 12, 2020, the day after CEO Elon Musk declared he had opened the facility "against Alameda County rules" that shut down production in late March. Local officials described the reopening as ramping up "minimum basic operations." The company is expected to be in full production this week. Justin Sullivan/Getty Images
An aerial view of Tesla's plant in Fremont on May 12, 2020, the day after CEO Elon Musk declared he had opened the facility "against Alameda County rules" that shut down production in late March. Local officials described the reopening as ramping up "minimum basic operations." The company is expected to be in full production this week. (Justin Sullivan/Getty Images)

Tesla Reopens, But Battle Between Carmaker and Alameda County Isn't Over

Tesla Reopens, But Battle Between Carmaker and Alameda County Isn't Over

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A week after welcoming thousands of workers back to its electric car plant in Fremont in defiance of Alameda County health orders, Tesla is officially resuming full production at the facility.

At the same time, Alameda County joined other jurisdictions in the region Monday in taking the next step toward reopening businesses on a broader scale. With the number of new coronavirus cases and COVID-19 deaths leveling off, the county will allow curbside retail along with manufacturing and warehouse firms.

But the battle between the company and the county is not over, with a Tesla lawsuit challenging the health officials' authority to shut down the plant during the coronavirus pandemic still pending in federal court.

And some critics of Tesla CEO Elon Musk say issues raised by his false and inflammatory statements about shelter-at-home orders, threats to move the company, personal insults to health officials and open contempt for directives intended to protect company workers remain unresolved.

Musk has publicly questioned the seriousness of the coronavirus threat ever since pandemic began. When six Bay Area counties and the city of Berkeley imposed the nation's first shelter-at-home orders in mid-March, Musk told Tesla employees he intended to continue working. The Fremont plant shut down a week late and only after a public dispute involving the Alameda County Sheriff's Office.

Musk's displeasure with the COVID-19 measures spilled out in a Tesla earnings call on April 29, when he noted that the Fremont factory's continued closure posed a "serious risk" to the company's financial performance.

He went on to describe the health orders, which had just been extended, as "forcibly imprisoning people in their homes against all their constitutional rights, in my opinion, and breaking people's freedom in ways that are horrible and wrong and not why people came to America or built this country."

He wasn't finished. In answer to another question, he repeated his baseless claim that people were subject to arrest if they left home.

"This is fascist," he said. "This is not democratic. This is not freedom. Give the people back their goddamn freedom."

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Fast forward to the week before last. In the midst of discussions between Alameda County and Tesla plant officials that appeared headed toward an agreement to open the Fremont facility on May 18, Musk began agitating for an immediate restart.

Tesla filed suit, arguing that county health orders were in conflict with state directives that allowed some manufacturing to resume. Musk also took a swipe at Alameda County's interim health officer, Dr. Erica Pan — calling her "ignorant and unelected"— and warned that he was ready to move his company out of California altogether.

Then came last week's reopening — signaled first by the appearance of thousands of employee cars at the plant, then by Musk's tweet that the plant was resuming production and that he was willing to be arrested, and finally by Alameda County's repeated conciliatory statements that it was working things out with plant managers and that the company had a satisfactory plan to go ahead with a ramp up from "basic minimum operations" in preparation for a restart.

Asked on CNN's "State of the Union" program on Sunday whether Tesla had been given preferential treatment when it suffered no legal consequences for disobeying the health orders, Gov. Gavin Newsom praised what he called "the spirit of cooperation" shown by the county and company.

Newsom's remarks were in line with sentiments expressed last week by Jim Wunderman, president and CEO of the Bay Area Council, a group representing hundreds of businesses and public agencies in the region.

"We have the world's most iconic automobile manufacturer here in the Bay Area, which we'd like to keep," Wunderman said in an interview. "It's not just an auto manufacturer. They're making the kind of vehicles that are the future of the world. They're contributing something very special."

He said the council was "very satisfied" with Tesla getting back to work, though "under no circumstances are we suggesting any business owner violate any regs or anything like that. We didn't in this case, and we wouldn't in any other case."

Asked what he would make of the situation if he were a bookseller or florist or other small business owner required to remain closed while Musk and Tesla defied the Alameda County orders, Wunderman said the automaker's situation is unique.

"Look, in the real world, as a bookseller or a florist — and we love our booksellers and we revere our florists — they don't have the leverage Tesla had with 10,000 employees and the kind of financial value and impact that a plant like (Fremont) has," Wunderman said.

Elon Musk and Tesla

Wunderman said the Bay Area counties had been "heroes — they save maybe hundreds or thousands of lives" by imposing shelter-at-home orders when they did.

"Let's not kid around about that — they did a great job," he said. "But now they have to do the great job of getting folks back to work."

But Robert Reich, former secretary of labor and a professor of public policy at UC Berkeley, says the way Tesla went about its reopening sets a terrible precedent.

"It puts every business owner in an awkward and difficult position, because if you have enough wealth and power, you have political clout and you can defy orders and you can get what you want," Reich said. "But most people who are in business can't do that and should not do that. They understand that they have to obey the law, that they have certain social responsibilities."

Reich said Musk failed in those responsibilities by reopening the plant before health authorities had signed off on the company's safety measures. He was especially critical of Musk for putting employees who have exhausted their paid time off in the position of having to report to work amid the pandemic or not get paid.

"That is the worst and most inhumane choice you can impose," Reich said.

Reich said he believes Tesla and Musk should face some state sanction for defying the county health orders.

"Who is calling the shots here?" he asked. "Public health authorities and authorities who are there to protect people or a very wealthy billionaire businessman who is there basically to maximize shareholder value and his own wealth?"

Ann Skeet, senior director of leadership ethics at Santa Clara University's Markkula Center for Applied Ethics, said last week that Musk's behavior followed a familiar arc.

"Silicon Valley leaders unfortunately have a reputation for disregard for laws and regulations, and they tend to wear it as a badge of honor," Skeet said. "It's not necessarily productive, and it's certainly not considerate of the rest of the community and the broader society they're operating in."

Skeet said there were other aspects of Musk's confrontation with county authorities that "were not a good look."

"Another overlay that's really unfortunate is a highly qualified female authority being challenged by a male tech CEO in a community, Silicon Valley, that already has not a great reputation for gender relationships," she said.

Skeet said she believes that companies' behavior will have lasting effects.

"People are going to have long memories on how leaders have responded in this moment," she said. "And leaders who have put the health and well-being of their workers and customers front and center are going to bounce back more quickly, I think, than those that haven't."

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