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 Is FuriousMr. Musk opened his California factory this week in defiance oflocal orders. He has also criticized the response to the pandemicas “dumb” and “fascist.” By Niraj Chokshi Published May 13,2020Updated May 19, 2020 A few months ago, everything seemed to begoing Elon Musk’s way, as he presided over an upstart electric carcompany that was worth more than General Motors, Ford Motor andFiat Chrysler combined. That company, Tesla, had reported profitstwo quarters in a row, proving that it could earn money even as itgrew. Its stock was surging. Mr. Musk opened a factory in China andwas planning another in Germany. And his other business, SpaceX,was poised to become the first to ferry NASA astronauts to orbitfrom American soil since 2011, a trip scheduled for the end of thismonth. Mr. Musk also claimed vindication by defeating a defamationlawsuit filed by a British diver he had called a “pedo guy.” He wasstaying out of trouble on Twitter, where he has long antagonizedcritics and regulators, who fined him $20 million in 2018 forstatements he made there. His girlfriend was pregnant, too, with ason born this month. But the coronavirus set Mr. Musk off.Society’s response to the pandemic was “dumb” and a “panic,” hesaid, arguing that the threat is overstated. And governmentstay-athome orders were, in his view, unnecessarily stalling hisplans to revolutionize the auto industry and help solve climatechange. He attacked local officials in the San Francisco Bay Areafor not letting him reopen Tesla’s factory, which he did this weekanyway, in defiance of their instructions. Mr. Musk, thebillionaire entrepreneur who co-founded PayPal, has always beenvolatile. His latest attacks and statements have raised questionsabout Tesla’s financial health and his own judgment, but they alsoreflect a recognition of the influence he wields as one of thetechnology industry’s best-known iconoclasts. “This is somebody whoknows that what he says gets heard across the globe, and triesBBM208/03 May 2022 Page 3 of 7 to make a point about why he doesn’ttake system-level constraints as a given,” said Rahul Kapoor, aprofessor of management at the University of Pennsylvania’s WhartonSchool. Mr. Musk’s anger was stoked in March 2020 when localofficials ordered Tesla to close its factory, in Fremont, Calif.,just as the company was poised to accelerate production of a highlyanticipated new sport utility vehicle, the Model Y. Less than ayear earlier, the company had been desperate for cash, and WallStreet had grown increasingly sceptical that Tesla could becomeanything more than a maker of luxury cars that only a sliver ofhumanity could afford. But Tesla’s fortunes had started to turnbefore the pandemic. In October 2019, the company announced aquarterly profit, a sign that it had solved production problems.Tesla’s stock began a long, astonishing rally. Shares peaked at$917 in February, up from $350 only three months before. Despitesuffering along with the broader market in March and April, thestock closed at $790.96 a share on Wednesday, valuing the companyat about $146 billion. By contrast, investors value G.M., whichproduces many more cars than Tesla, at less than $31 billion. ByMarch 2020, Tesla was on a tear. Despite being slowed by theoutbreak in China, the new Shanghai factory had reopened. InEurope, Tesla’s Model 3 sedan was outselling cars made byautomakers like Volkswagen. The carmaker had just begun BBM208/03May 2022 Page 4 of 7 deliveries of the Model Y, which starts atabout $53,000, in the ballpark of comparable S.U.V.s from BMW andMercedes-Benz. But Mr. Musk’s dreams of dominating the car industrywere put on hold when Alameda County forced the Fremont plant,which brings in most of the company’s revenue, to shut down in lateMarch. That frustrated Mr. Musk, who had long dismissed theseriousness of the coronavirus. He has promoted unproven researchsuggesting that deaths from the virus are overstated and, aroundthe time the factory was closed, predicted that there would be zeronew cases in the United States by the end of April. (There werealmost 32,000 new cases on April 30.) Mr. Musk resisted closing theplant, and in a late-April 2020 call with analysts calledstay-at-home orders “fascist.” “They’re breaking people’s freedomsin ways that are wrong and are not why people came here or builtthis country,” said Mr. Musk, who is a native of South Africa. Thatweek, he posted several odd messages on Twitter. Tesla’s stock was“too high,” he said, and added that he would sell “almost allphysical possessions,” including his homes. Last week, Mr. Musk’sanger about 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. BBM208/03 May 2022 Page 5of 7 President Trump, who has been pushing states to allowbusinesses to restart, voiced support for Mr. Musk, writing onTwitter on Tuesday that California should let Tesla reopen theplant “NOW.” But the president’s statement is unlikely to swayCalifornia’s governor, Gavin Newsom, a Democrat, who has deferredto counties on such issues. The state has authorized manufacturing,but Mr. Newsom said Monday that “if a county doesn’t want to go asfar,” local orders would prevail. Mr. Musk’s decision to reopen thefactory has put employees in a difficult position. In an email senton Monday, the company told employees that they may remain home butwould not be paid if they had already used up their time off andmight also lose unemployment benefits, as determined by localgovernment agencies. On Wednesday, the company said employees whochose not to go in would not be penalized. Several Tesla employees,who asked to speak anonymously for fear of retribution, said thecompany was putting a priority on profits over people. One man whoworked at the factory on Tuesday said the company had checkedemployees’ temperatures at the start of his shift, distributedmasks and rearranged a break room. But, he said, little had changedon the production line, where it is hard to avoid coming within sixfeet of others. As the factory reopened, Mr. Musk thanked employeesfor making “the factory come back to life.” “I have vastly morerespect for someone who takes pride in doing a good job,” he saidin an email, “whatever the profession, than some rich or famousperson who does nothing useful.” Tesla gave workers permission tostay home rather than risk getting covid-19. Then it senttermination notices. When he defiantly reopened the company’s plantin Fremont, Calif., against county orders in May 2020, Elon Muskpromised Tesla employees they could stay home if they felt uneasy.They would not be penalized, he said. If “you feel uncomfortablecoming back to work at this time, please do not feel obligated todo so,” he wrote in an email sent to the company’s factory workersin early May that was viewed by The Washington Post. Nonetheless,two Tesla workers say they received termination notices alleging a“failure to return to work” after they opted to take unpaid leaveto protect themselves and their family members when the factoryrestarted production the second week of May. BBM208/03 May 2022Page 6 of 7 Elon Musk calls Tesla workers back to the factory(again). Health officials say no (again). In late April 2020, Muskwent on an erratic tweetstorm that culminated in his writing “FREEAMERICA NOW” in response to widespread stay-at-home orders. Helaunched into an expletive-laden rant on the company’s earningscall the next day, labelling quarantine measures “fascist” anddemanding that politicians return people’s “freedom.” Muskdefiantly reopened the factory in early May, winning PresidentTrump’s support as he bucked the county’s orders once more.Ultimately, county officials backed down and agreed to allow Teslato fully reopen May 18th, 2020. The Post reported earlier in June2020 that workers at the factory’s seat assembly plant were toldmultiple colleagues had tested positive for the coronavirus — andAlameda County officials confirmed Tesla had reported coronaviruscases in Fremont. Laurie Shelby, Tesla’s vice president forenvironment, health and safety, told workers in an email that therehad been no workplace transmissions of the virus, though it wasunknown how the exact origin of each of the cases would have beendetermined. Jane McAlevey, a union organizer who serves as seniorpolicy fellow at the University of California at Berkeley’s Centrefor Labour Research and Education, said Musk’s treatment of hisworkforce has been typical of tech companies in Silicon Valley. “Heis causing untold problems for his workers,” she said. “He hasstressed them out — there’s a huge history there before the covidcrisis of health and safety violations. They’re saddled by the kindof promises and rushed production that get people hurt, and nowhe’s doing it again during a pandemic.” Since learning of thecases, some workers say they’ve been beset by fear of coming downwith covid-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 BBM208/03 May 2022Page 7 of 7 investigations and fines by the Occupational Safety andHealth Administration than its competitors. Source:https://www.nytimes.com/2020/05/13/busi ... 1615756883 AnswerALL questions
1. Discuss the details of the Tesla’s scandal. (30 marks)
2. Discuss whether or not Elon Musk should be held liable forthe reported 450 coronavirus cases between May and December 2020,as he defiantly re-opened Tesla Fremont, California against countyorders. (30 marks)
3. Elaborate on the possible course of action (s) to prevent acompany’s defiance against the local government’s order to closedown the manufacturing plant to prevent the spread of thecoronavirus and also to put employees’ well-being at risk. (40marks