The dispute over reopening the Tesla factory may be over

It appears the dispute between Tesla and San Francisco Bay Area authorities over the reopening of a factory in the face of coronavirus shutdown orders is coming to an end.

The Alameda County Public Health Department announced on Twitter late Tuesday that the Fremont, Calif., plant will be allowed to go beyond basic operations this week and start making vehicles on Monday — as long as it delivers on the worker safety precautions that it has agreed to. The statement didn’t acknowledge that the Tesla factory already been operating for days.

In a new internal email sent Wednesday seen by Bloomberg, Tesla’s head of North American human resources, Valerie Capers Workman, said the company is ramping up operations this week and preparing for full production.

Representatives for the electric carmaker didn’t respond to a request for comment.

Shares of the company were little changed in after-market trading Wednesday after falling 2.3% earlier to close at $790.96.

Fremont police will verify whether Tesla is holding up its part of the agreement, according to the health department. The release said public health indicators must remain stable or improve for the factory to stay open.

“We will be working with the Fremont PD to verify Tesla is adhering to physical distancing and that agreed-upon health and safety measures are in place for the safety of their workers as they prepare for full production,” the Tuesday release stated.

Tesla’s factory reopened Monday, with Tesla founder Elon Musk tweeting: “I will be on the line with everyone else. If anyone is arrested, I ask that it only be me.” Operations apparently continued into Tuesday.

The company met a Monday deadline to submit a site-specific plan to protect worker safety. But the reopening defied orders from the health department, which has deemed the factory a nonessential business that can’t fully open under restrictions intended to slow the spread of the novel coronavirus.

“If the reports we have received are true, Tesla is engaging in work beyond Minimum Basic Operations, and is in violation of the health officer order,” Colleen Chawla, the county Health Care Services Agency director, said in a letter Monday. “We hope that Tesla — like other businesses who have been notified of noncompliance — comes into compliance with the order without the need for additional enforcement measures.”

State law allows a fine of up to $1,000 a day or up to 90 days in jail for operating in violation of health orders.

The plant in Fremont, a city of more than 230,000 people south of San Francisco, had been closed since March 23. It employs about 10,000 workers.

Public health experts have credited the stay-at-home orders with slowing the spread of the coronavirus, helping hospitals handle an influx of cases. The coronavirus causes mild or moderate symptoms for most people. But it has killed more than 80,000 people in the U.S., with the death toll rising.

Alameda County was among six San Francisco Bay Area counties that were the first in the nation to impose stay-at-home orders in mid-March. Gov. Gavin Newsom has repeatedly said that counties can impose restrictions that are more stringent than state orders.

The order in the Bay Area has been extended until the end of the month, but the counties plan to allow some limited business and manufacturing starting May 18, the same day Detroit automakers plan to reopen auto assembly plants. Some auto parts plants were to restart production this week.

The Detroit automakers’ 150,000 U.S. workers are represented by the United Auto Workers union, which has negotiated for added safety precautions. Tesla’s workers do not have a union.

Musk, whose company has sued Alameda County, seeking to overturn its order, threatened to move Tesla’s manufacturing operations and headquarters from the state.

Tesla contends in the lawsuit that Alameda County can’t be more restrictive than orders from Newsom. The lawsuit says the governor’s coronavirus restrictions refer to federal guidelines classifying vehicle manufacturing as essential businesses that are allowed to continue operating.

Tesla released a plan to maintain worker safety, including the wearing of gloves and masks, installing barriers between workers and maintaining social distancing. Alameda County Supervisor Scott Haggerty said the company initially pushed back on checking employee temperatures before boarding a company bus to get to work. But Tesla relented, he said, and agreed to check workers.

Bloomberg contributed to this report.