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Local government gives in and allows Tesla car production to recommence after CEO Elon Musk threatens to relocate California headquarters
Tesla (TSLA) founder and CEO Elon Musk’s vocal threats and demands would appear to have been successful in obtaining local government approval to resume production at the carmaker’s California company headquarters.
Musk has been a fervent critic of the lockdown measures imposed to reduce the spread of the Covid-19 virus and has regularly stressed the need for the American economy to return to normal.
Despite the measured go-ahead recently announced by California Governor Gavin Newsom, Musk’s efforts to resume manufacturing were thwarted by the interim health officer of Alameda County. After filing a lawsuit, the billionaire took to Twitter and stated: “Frankly, this is the final straw. Tesla will now move its HQ and future programmes 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 Monday, May 11, Musk announced that production would resume, regardless of the health official’s resistance and declared: “I will be on the line with everyone else. If anyone is arrested, I ask that it only be me.”
Following such vocal opposition, the Alameda County health department announced that Tesla could resume “minimum basic operations,” and outlined the need to improve employee health screening procedures and ways in which employees can provide feedback regarding safety protocols.
When asked his opinion, Governor Newsom stated: “We recognise localism… my belief, hope and expectation is that as early as next week they will be able to resume.”
Up 94 per cent on the year-to-date , Tesla’s stock has fared far better than other auto manufacturers, even despite its own CEO tweeting that he considered it “too high”. Indeed, whereas Ford lost almost $2bn (£1.62bn, €1.84bn) in the first quarter of 2020, Musk’s company turned a profit of $16m.
The grinding to a near-complete halt of car production and car sales will nonetheless weigh heavily in the second quarter. Musk will hope that his pressure and threats will reduce the expected damage.
