Tesla tells California employees to return to work in defiance of county orders

(Reuters) – Tesla Inc (TSLA.O) on Monday told employees at its primary vehicle factory in California to return to work, defying local officials, who said days earlier that the plant should remain closed as lockdown measures remain in effect to curb the spread of the coronavirus.

The scuffle comes as states and cities around the United States are experimenting with ways to safely reopen their economies after the virus outbreak shuttered businesses and forced tens of millions of Americans out of work.

Tesla Chief Executive Elon Musk over the weekend threatened to leave California for Texas or Nevada over the fight. His move has highlighted the competition for jobs and ignited a rush to woo the billionaire executive by states that have more quickly reopened their economies in response to encouragement from U.S. President Donald Trump.

In an email on Monday, Tesla referred to an order on Thursday by California’s governor allowing manufacturers to resume operations and said that as of Sunday, previously furloughed employees were back to their regular employment status.

“We’re happy to get back to work and have implemented very detailed plans to help you keep safe as you return,” according to the email seen by Reuters and titled “Furlough Has Ended And We Are Back To Work in Production!”

Separately on Monday, U.S. Treasury Secretary Steven Mnuchin said California should do whatever is necessary to help the electric carmaker reopen its only U.S. vehicle factory if it wants to keep the company in its state.

“California should prioritize doing whatever they need to do to solve those health issues so that he can open quickly and safely or… he’s moving his production to a different state,” Mnuchin said in a CNBC interview.

California Governor Gavin Newsom on Monday said he spoke to Musk several days ago and that the Tesla founder’s concerns helped prompt the state to begin its phased reopening of manufacturing last week.

“I have not only known that company but I have known its founder for many, many years,” Newsom said in his daily coronavirus press briefing. “I have great reverence for their technology, for their innovative spirit, for their leadership.”

Health officials in Alameda County, where the Fremont factory is based, said on Friday and Saturday it must remain closed as long as local lockdown measures to curb the spread of the coronavirus remain in effect.

Tesla on Saturday sued the county, and Musk threatened in a tweet to leave the state, where the company is among the largest employers and manufacturers, for Texas or Nevada.

Tesla’s lawsuit accused Alameda County of violating California’s constitution by defying Newsom’s orders on Thursday allowing manufacturers to reopen.

Alameda County did not respond to requests for comment on Monday.

A Texas official reached out to Musk on Twitter, saying his county was available immediately to accommodate Tesla and invited the billionaire CEO for a visit.

“We have a motivated, pro-business governor,” said Richard Cortez, county judge of Texas’ Hidalgo County. “What we no longer have is a shelter at home mandate.”

Musk in response tweeted: “Note is much appreciated.”

County judges in Texas have a wide range of judicial and administrative duties. Hidalgo County borders Mexico, where many U.S. automakers source supplies.

Tesla shares dropped 0.99% to $811.29 on Nasdaq. They had fallen more than 3% premarket after China’s Passenger Car Association reported that the company’s Model 3 sales in April were down 64% on the month.

In addition to the Fremont plant, Tesla also has an auto factory in Shanghai, and is building another in Berlin.

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