Tesla files lawsuit in bid to reopen Fremont, California factory

Elon Musk says he is ready to abandon California as the electric-car company’s home.

Employees work on Model S cars in the Tesla factory in Fremont, California Picture: AP

Tesla has asked a federal judge to allow the electric-car maker to reopen its lone US assembly factory, calling a local government’s insistence that it remain closed to fight the spread of COVID-19 a power grab that defies the US constitution.

The lawsuit, filed on Saturday, followed a new string of messages on Twitter by a frustrated chief executive, Elon Musk, saying he was ready to abandon California as the company’s home after Alameda County officials said Tesla could not resume production even as the state begins to start reopening.

Musk, through Twitter, on Saturday morning (US time) said: “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!”

By the evening the company released details of how it planned to keep its workers safe, saying it had begun the “process of resuming operations”. It didn’t specify when production would restart.

The company filed its suit in the US District Court for the Northern District of California, seeking an injunction against the county’s order and arguing, in part, that the local government had overstepped its authority by overruling the California Governor’s approval for businesses to reopen.

“Alameda County’s power-grab not only defies the Governor’s order, but offends the federal and California constitutions,” Tesla said in the lawsuit, filed by outside lawyer Alex Spiro.

California Governor Gavin Newsom on Thursday began detailing how the state would begin phasing in the reopening of some businesses starting the following day, including manufacturing. He also said he supported local communities enforcing stronger shelter-in-place rules, such as those in the San Francisco area, including Fremont and Alameda County, where Tesla’s factory is located.

Alameda County has reported more than 2000 cases of people infected with the COVID-19 virus up to the end of Friday, including 71 deaths from the disease.

On Saturday, the county said it has been communicating and working closely with Tesla’s “team on the ground in Fremont”, noting that it was a collaborative and “good-faith effort to develop and implement a safety plan that allows for reopening while protecting the health and wellbeing of thousands of employees”.

The county added: “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.”

It didn’t respond to a request for comment about the lawsuit.

Tesla initially fought to stay open in March when the local order was first announced, but eventually relented under pressure, stopping production on March 23. It had hoped to resume manufacturing on May 4, a day after the shelter-in-place had been scheduled to be lifted, but that order was extended last week through to the end of May, sparking Mr Musk to call such restrictions a violation of people’s rights and equate them to fascism.

After Mr Newsom’s announcement on Thursday about phasing in businesses, Mr Musk cheered the news on Twitter. The CEO sent a memo to his employees saying the factory, which employs more than 10,000 workers and assembles the Model 3 compact car, would resume work on Friday. But hours later, the public health department of Alameda County said in a statement that Tesla had been informed that it could not reopen yet.

In the lawsuit, Tesla said its ­facilities in Lathrop, which is part of nearby San Joaquin County, continued to operate, saying both counties had experienced a similar infection and death rate. “This disparate treatment is arbitrary and without a rational basis,” the lawsuit said.

Mr Musk, a frequent user of Twitter, on Saturday said on the social-media site: “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 dependent on how Tesla is treated in the future. Tesla is the last carmaker left in CA.”

On Saturday, after Mr Musk’s Twitter messages, Fremont mayor Lily Mei issued a statement saying it was time for the “county to engage with our local businesses to come up with acceptable guidelines for reopening our local economy.” The city’s police department has been responsible for enforcing the order locally.

“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,” the mayor said. “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.”

Mr Musk in March said Tesla was seeking a site for a new US car assembly factory in the middle of America, stoking speculation that Texas might be in the mix.

Tesla began the year planning to boost deliveries more than 36 per cent, though last month didn’t reiterate the guidance when it announced its first-quarter results.

An extended shutdown in California poses a risk to Tesla’s effort to ramp up production of its latest car, the Model Y compact sport-utility vehicle, which Mr Musk has said could overtake the Model 3 car as its bestseller.