Tesla’s Fremont plant had been running with reduced staffing.


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After a protracted and cloudy back-and-forth battle, Tesla has announced it will close its Fremont, CA factory on March 23 in acknowledgement of the coronavirus crisis. Elon Musk’s electric car plant had been continuing production with a reduced staff and increased safety measures, but the company will now follow the lead of most other automakers in the US by temporarily shuttering their plant.

CEO Elon Musk and Tesla leadership had come under widespread criticism from government officials, industry watchdogs and many consumers for attempting to keep production humming in the face of Alameda County’s COVID-19-induced “shelter in place” order.

This will-they, won’t-they saga has vacillated back and forth dramatically over the last 24 hours.

On Tuesday, it was initially reported that Tesla wouldn’t be subjected to the shelter-in-place order designed to keep residents inside their homes with travel exceptions only made for excursions to secure essential supplies including food and medicine. 

However, the Alameda County Sheriff’s Department shortly thereafter issued a statement proclaiming Tesla “is not an essential business as defined in the Alameda County Health Order. Tesla can maintain minimum basic operations per the Alameda County Health Order.”

Confusingly, a county spokesperson previously told the Los Angeles Times that the Tesla had been granted an exemption from the order.

Then came an email statement obtained by CNBC attributed to Tesla’s head of human resources. The communique to all employees stated, “there are no changes in your normal assignment and you should continue to report to work if you are in an essential function.” The “essential function” portion mentioned production, service, deliveries, testing and more. 

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The automaker’s HR boss cited “conflicting” guidance from various levels of government for the drama, and the note said Tesla was awaiting final word from the city, county, state and federal authorities. Pending those directives, the email said employees were able to work as long as they felt comfortable. (The company also pledged not to discipline workers who chose not to report to work, or who cited absence due to illness.

Most recently, Tesla was reportedly granted the ability to continue staffing its Fremont factory with 2,500 workers — roughly a quarter of the facility’s 10,000-plus employees. 

The shutdown order comes at a pivotal time for Elon Musk and Co., as deliveries have just been getting underway for the company’s important new Model Y electric SUV. Back in late January, Tesla was also forced to temporary close its new Shanghai assembly plant as the coronavirus enveloped China. That plant had just started to deliver Model 3 sedans to local customers.

After initially calling the ramping panic around the coronavirus “dumb” on social media on March 6, Elon Musk has been showing signs that he is taking COVID-19 more seriously as of late. Earlier today, the enigmatic executive said he would be willing to join the raft of automakers investigating production of medical ventilators seen as key to fighting coronavirus.


This story is developing…

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