Tesla CEO Musk offered to use his Californian factory for the manufacture of masks and other protective equipment.
After weeks of disputes between Tesla CEO Elon Musk and local and state governments in California, the electric vehicle manufacturer will restart its full-fledged production in the Californian factory of Fremont.
The California Bay Area was one of the first to implement a severe shutdown in response to the coronavirus epidemic. The rules forced Tesla to stop production.
At first, Tesla CEO Musk was cooperative and offered to use his Californian Factory for the manufacture of masks and other protective equipment.
But when he was denied a proposed reopening due to the lengthy Alameda County lockdown, Musk took to Twitter to decry the orders, calling them fascist and saying he was willing to be arrested if that’s what it took to reopen his car plant.
But this week, the San Francisco Chronicle received a letter indicating that it was legally granted to advance to Tesla.
Larry Shelby, vice president of the Environment, Health and Safety Organization, wrote in the announcement, “We have local support for the factory to return to full production starting this week.”
Threat or promise?
Part of Musk’s pressure campaign on California officials was to threaten to move his entire factory across the state’s borders to Nevada or Texas.
The Fremont facility employs 11,000 people, which means such a move could have a serious impact on the local community and its economy.
But California Governor Gavin Newsome says he never took the threat seriously.
“I’m not worried about Elon ever leaving,” the Democrat said on CNBC’s Fast Money. “I’ve had a lot of conversations with him. He has promoted success and innovation for decades and accelerated the low carbon green-growth economy and the state of California.”
Golden State is a gem
The company’s origins have been a rock to California Tesla ever since. Golden State House is not only Tesla’s corporate and manufacturing headquarters, but Californians are also the company’s leading customer base.
Tesla vehicles have become a high fashion in a state where luxury technology and outspoken progressives are the centres of culture. In fact, of the 158,925 sales Tesla closed last year, more than 59,000 were made in California.
Although the electric vehicle manufacturer can save on taxes by moving to Nevada, the cost of moving the entire manufacturing operation can be huge. Even in such a case, there is little chance of a complete Tesla business in California.
However, the erosion from those businesses to reopen Tesla’s Hall Pass to restart production before the Bay Area lockdown is eliminated at other companies is certain. Size is important.
Alameda County has already announced that its locking orders will test the patience of many in the local economy and will last until the end of May.