Musk: Tesla restarting production against Alameda County rules

On Saturday, Tesla filed a lawsuit against Alameda County for not allowing the company to restart operations at its factory based in Fremont, California, and CEO Elon Musk threatened to move Tesla’s headquarters to Nevada or Texas. By Monday, Musk confirmed Tesla was restarting production against Alameda County rules, adding that he’d be on the line with everyone else and if anyone was arrested, he asked that it only be him. The Final Round panel discusses.

Video Transcript

AKIKO FUJITA: Shares of Tesla trading about 1% lower today after Elon Musk threatened over the weekend to leave California, if Tesla workers were not allowed to resume manufacturing. We know that a lawsuit has already been filed against Alameda county, where, of course, Tesla's manufacturing facility is. I want to bring in Jared Blikre.

Jared, there's been some headlines today that seems to suggest that manufacturing has resumed. We're not sure on what capacity level. But Elon Musk certainly digging in his heels here saying that Alameda county is not going by what California has set out, and Tesla workers should be allowed to go back on the line.

JARED BLIKRE: That's right, Akiko. We don't know exactly what their production is or what they're trying to ramp up to right now. But just going over a couple of these tweets that we have on the Wi-Fi interactive, first, Elon musk said, Tesla is restarting its production today against Alameda county rules. I will be on the line with everyone else. If anyone else is arrested, I ask that it only be me, also, saying, yes, California approved, but an unelected county official illegally overrode.

Also, all other auto companies in the US or approved resume. Only Tesla has been singled out. This is super messed up. So there you have it. Just take a quick look at the stock today down about 1%, not a big day for Tesla. But overall given the market environment, we've seen how it is up year to date at a pretty impressive 93%, Akiko.

AKIKO FUJITA: Yeah, let me bring in Rick. You know, Rick, Tesla is a huge employer in California, so this is certainly going to be important for the state as well. But I guess even beyond Tesla, this seems to just point to just what a messy process reopening is. On the one hand, you've got the state saying one thing. Fremont, where Tesla is based, their mayor has said, we think Tesla workers should be allowed back. And then you've got Alameda county saying, no, they're not allowed back yet, because things are not safe.

RICK NEWMAN: Yeah, so there's no single standard that governs reopenings here. That's obviously a problem. When California issued its reopening guidelines, they did say that individual counties could impose guidelines that are stricter than the state standards. I think that is the source of the problem. You either need to have one statewide standard, or you need to have no statewide standard or just guidelines and leave it up to the counties.

So Elon Musk, just forcing the issue here. He's suing the county, really going after this one public health official, he says, is standing in the way. And he's right about the other automakers reopening. I mean, GM and Ford are going to restart their assembly lines next week in Michigan, and Ohio, and other places in the Midwest.

I mean, just to put that in perspective, Michigan has been hit very, very hard by the coronavirus, harder than the area where the Tesla factory is located in California. So I think Elon Musk is going to win this one. What I don't think he's likely to do is move that manufacturing facility out of California anytime soon. That would be very, very disruptive, and I don't think the company can deal with that right now.

- Yeah, I mean, Rick, he took that over. I forget what that was. I think it was a joint venture facility between Toyota and--

RICK NEWMAN: Yeah, it was an old Toyota, General Motors venture.

- Yeah, so to your point, I mean, he's-- and also, the thing is there's talk of him moving to Nevada or even Texas. And in a way, he's the quintessential Californian. But actually, it's kind of the quintessential Texan, too, you know?

RICK NEWMAN: A libertarian.

- To heck with the government and all that stuff. But you're right. You can't just simply-- I mean, if there's any factory that's hard to move, it's an auto assembly plant. So good luck with that.

RICK NEWMAN: The thing to watch for here is as the company expands as they open new facilities, I think it's a good bet that they will not open any new facilities in California, and he has talked about opening up in Texas before. So that might be something to look at, and it's easier to move a headquarters than it is an assembly line. So that could happen to.