Coronavirus Wrecked Tesla’s Momentum and Elon Musk Is Furious Mr. Musk opened his California factory this week in defian

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Coronavirus Wrecked Tesla’s Momentum and Elon Musk IsFurious
Mr. Musk opened his California factory this week in defiance oflocal orders. He has also
criticized the response to the pandemic as “dumb” and“fascist.”
By Niraj Chokshi
Published May 13, 2020Updated May 19, 2020
A few months ago, everything seemed to be going Elon Musk’s way,as he presided
over an upstart electric car company that was worth more thanGeneral Motors, Ford
Motor and Fiat Chrysler combined.
That company, Tesla, had reported profits two quarters in a row,proving that it could
earn money even as it grew. Its stock was surging. Mr. Muskopened a factory in China
and was planning another in Germany. And his other business,SpaceX, was poised to
become the first to ferry NASA astronauts to orbit from Americansoil since 2011, a trip
scheduled for the end of this month.
Mr. Musk also claimed vindication by defeating a defamationlawsuit filed by a British
diver he had called a “pedo guy.” He was staying out of troubleon Twitter, where he has
long antagonized critics and regulators, who fined him $20million in 2018 for statements
he made there. His girlfriend was pregnant, too, with a son bornthis month.
But the coronavirus set Mr. Musk off. Society’s response to thepandemic was “dumb”
and a “panic,” he said, arguing that the threat is overstated.And government stay-at
home orders were, in his view, unnecessarily stalling his plansto revolutionize the auto
industry and help solve climate change. He attacked localofficials in the San Francisco
Bay Area for not letting him reopen Tesla’s factory, which hedid this week anyway, in
defiance of their instructions.
Mr. Musk, the billionaire entrepreneur who co-founded PayPal,has always been volatile.
His latest attacks and statements have raised questions aboutTesla’s financial health
and his own judgment, but they also reflect a recognition of theinfluence he wields as
one of the technology industry’s best-known iconoclasts.
“This is somebody who knows that what he says gets heard acrossthe globe, and tries
to make a point about why he doesn’t take system-levelconstraints as a given,” said Rahul Kapoor, a professor ofmanagement at the University of Pennsylvania’s Wharton School. Mr.Musk’s anger was stoked in March 2020 when local officials orderedTesla to close its factory, in Fremont, Calif., just as the companywas poised to accelerate production of a highly anticipated newsport utility vehicle, the Model Y. Less than a year earlier, thecompany had been desperate for cash, and Wall Street had grownincreasingly sceptical that Tesla could become anything more than amaker of luxury cars that only a sliver of humanity could afford.But Tesla’s fortunes had started to turn before the pandemic. InOctober 2019, the company announced a quarterly profit, a sign thatit had solved production problems. Tesla’s stock began a long,astonishing rally. Shares peaked at $917 in February, up from $350only three months before. Despite suffering along with the broadermarket in March and April, the stock closed at $790.96 a share onWednesday, valuing the company at about $146 billion. By contrast,investors value G.M., which produces many more cars than Tesla, atless than $31 billion. By March 2020, Tesla was on a tear. Despitebeing slowed by the outbreak in China, the new Shanghai factory hadreopened. In Europe, Tesla’s Model 3 sedan was outselling cars madeby automakers like Volkswagen. The carmaker had just begundeliveries of the Model Y, which starts at about $53,000, in theballpark of comparable S.U.V.s from BMW and Mercedes-Benz. But Mr.Musk’s dreams of dominating the car industry were put on hold whenAlameda County forced the Fremont plant, which brings in most ofthe company’s revenue, to shut down in late March. That frustratedMr. Musk, who had long dismissed the seriousness of thecoronavirus. He has promoted unproven research suggesting thatdeaths from the virus are overstated and, around the time thefactory was closed, predicted that there would be zero new cases inthe United States by the end of April. (There were almost 32,000new cases on April 30.) Mr. Musk resisted closing the plant, and ina late-April 2020 call with analysts called stay-at-home orders“fascist.” “They’re breaking people’s freedoms in ways that arewrong and are not why people came here or built this country,” saidMr. Musk, who is a native of South Africa. That week, he postedseveral odd messages on Twitter. Tesla’s stock was “too high,” hesaid, and added that he would sell “almost all physicalpossessions,” including his homes. Last week, Mr. Musk’s angerabout the factory boiled over, and he threatened to move thefactory out of California and sued the county in federal court. OnMonday, Mr. Musk officially reopened the Fremont plant, to thefrustration of some workers and county officials who had beennegotiating a reopening plan with Tesla for weeks. “I will be onthe line with everyone else,” he wrote on Twitter on Monday. “Ifanyone is arrested, I ask that it only be me.” Later that day, thecounty asked Tesla to cease operations until it reached anagreement with local officials. On Tuesday, the county said it hadreviewed the plan and “held productive discussions” with Tesla. Thecounty said that it had made safety recommendations and that ifTesla included them and public health conditions didn’t worsen, thecompany could reopen next week. County officials did not suggestthat they would hold Tesla to account for ignoring the order, butnoted that the Fremont police would verify that Tesla was adheringto safety measures as workers “prepare for full production.” OnTuesday, trucks were leaving the factory carrying cars and S.U.V.sas masked workers milled about. New cars were also parked in rowsoutside. The parking lot for employees was full. Tesla and Mr. Muskdid not respond to requests for comment
President Trump, who has been pushing states to allow businessesto restart, voiced support for Mr. Musk, writing on Twitter onTuesday that California should let Tesla reopen the plant “NOW.”But the president’s statement is unlikely to sway California’sgovernor, Gavin Newsom, a Democrat, who has deferred to counties onsuch issues. The state has authorized manufacturing, but Mr. Newsomsaid Monday that “if a county doesn’t want to go as far,” localorders would prevail. Mr. Musk’s decision to reopen the factory hasput employees in a difficult position. In an email sent on Monday,the company told employees that they may remain home but would notbe paid if they had already used up their time off and might alsolose unemployment benefits, as determined by local governmentagencies. On Wednesday, the company said employees who chose not togo in would not be penalized. Several Tesla employees, who asked tospeak anonymously for fear of retribution, said the company wasputting a priority on profits over people. One man who worked atthe factory on Tuesday said the company had checked employees’temperatures at the start of his shift, distributed masks andrearranged a break room. But, he said, little had changed on theproduction line, where it is hard to avoid coming within six feetof others. As the factory reopened, Mr. Musk thanked employees formaking “the factory come back to life.” “I have vastly more respectfor someone who takes pride in doing a good job,” he said in anemail, “whatever the profession, than some rich or famous personwho does nothing useful.” Tesla gave workers permission to stayhome rather than risk getting covid-19. Then it sent terminationnotices. When he defiantly reopened the company’s plant in Fremont,Calif., against county orders in May 2020, Elon Musk promised Teslaemployees they could stay home if they felt uneasy. They would notbe penalized, he said. If “you feel uncomfortable coming back towork at this time, please do not feel obligated to do so,” he wrotein an email sent to the company’s factory workers in early May thatwas viewed by The Washington Post. Nonetheless, two Tesla workerssay they received termination notices alleging a “failure to returnto work” after they opted to take unpaid leave to protectthemselves and their family members when the factory restartedproduction the second week of May.
Elon Musk calls Tesla workers back to the factory (again).Health officials say no (again). In late April 2020, Musk went onan erratic tweetstorm that culminated in his writing “FREE AMERICANOW” in response to widespread stay-at-home orders. He launchedinto an expletive-laden rant on the company’s earnings call thenext day, labelling quarantine measures “fascist” and demandingthat politicians return people’s “freedom.” Musk defiantly reopenedthe factory in early May, winning President Trump’s support as hebucked the county’s orders once more. Ultimately, county officialsbacked down and agreed to allow Tesla to fully reopen May 18th,2020. The Post reported earlier in June 2020 that workers at thefactory’s seat assembly plant were told multiple colleagues hadtested positive for the coronavirus — and Alameda County officialsconfirmed Tesla had reported coronavirus cases in Fremont. LaurieShelby, Tesla’s vice president for environment, health and safety,told workers in an email that there had been no workplacetransmissions of the virus, though it was unknown how the exactorigin of each of the cases would have been determined. JaneMcAlevey, a union organizer who serves as senior policy fellow atthe University of California at Berkeley’s Centre for LabourResearch and Education, said Musk’s treatment of his workforce hasbeen typical of tech companies in Silicon Valley. “He is causinguntold problems for his workers,” she said. “He has stressed themout — there’s a huge history there before the covid crisis ofhealth and safety violations. They’re saddled by the kind ofpromises and rushed production that get people hurt, and now he’sdoing it again during a pandemic.” Since learning of the cases,some workers say they’ve been beset by fear of coming down withcovid-19. It’s a matter of particular concern on the vehicleproduction lines, where multiple workers touch components and sharemachinery. Some pool into an outdoor tent where they assemblescars. Data found cases at Fremont, Calif., factory spiked inDecember Hundreds of COVID-19 cases were reported at Tesla Inc.’sproduction plant in Fremont, Calif., after it reopened in May 2020in defiance of local health regulations, according to a new report.Citing county data obtained by the website Plainsite, theWashington Post first reported that there were around 450coronavirus cases at the plant between May and December, 2020 whencases spiked to 125 cases. About 10,000 people work at the factory.Workers have complained about unsafe conditions at the Fremontfactory for years, and Forbes reported in 2019 that Tesla hadaccumulated significantly more workplace safety investigations andfines by the Occupational Safety and Health Administration than itscompetitors.
Discuss the details of the Tesla’s scandal.