COVID-19

Elon Musk says he’s defying government orders, reopening Tesla assembly plant

David Brancaccio, Nova Safo, and Alex Schroeder May 12, 2020
Heard on: Marketplace Morning Report
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Musk has also threatened to move his operation out of California altogether. Philip Pacheco/AFP via Getty Images
COVID-19

Elon Musk says he’s defying government orders, reopening Tesla assembly plant

David Brancaccio, Nova Safo, and Alex Schroeder May 12, 2020
Musk has also threatened to move his operation out of California altogether. Philip Pacheco/AFP via Getty Images
HTML EMBED:
COPY

Tesla’s Elon Musk says he’s defying government orders and opening up the carmaker’s assembly plant in California. Musk says his business is a special case. All eyes are on local government officials in Silicon Valley and what they’ll do next.

The high-profile showdown is the latest example of the dilemma facing business leaders around the country: When to reopen and how?

President Donald Trump tweeted Tuesday morning that the state of California should let Tesla and Elon Musk open the plant now, adding that “it can be done fast and safely.”

The response from local government officials has been more muted so far. Californa Gov. Gavin Newsom appeared caught off guard during a press conference Monday as reporters peppered him with questions about Musk’s decision, which he announced on Twitter. He said if anyone should be arrested for defying government orders, it should be him, not the 10,000 people who work for him.

County officials said in a statement they hoped to work things out. Tesla was supposed to submit a plan yesterday on protocols and a timeline for returning to full operation at the assembly plant. There’s no word yet if that’s happened.

The location of this particular assembly plant, Fremont, California, in Alameda County, is important. It’s a hot spot of COVID-19 infections. There have been 70 deaths, so health officials have been cautious about reopening too quickly.

But Musk has been critical of the pandemic shutdown as a whole, and he sued over the weekend to reopen his factory.

Wedbush analyst Dan Ives says Musk is feeling the pressure to resume business.

“Given that they make cars versus, let’s say, services like a Facebook — much different business model, which puts more pressure on them to reopen the factory just given the cash burn that happens every day,” Ives said.

Musk has even threatened to move his operation out of California altogether. But Ives is skeptical — he says that would be a tough and time-consuming thing to do.

COVID-19 Economy FAQs

How many people are flying? Has traveled picked up?

Flying is starting to recover to levels the airline industry hasn’t seen in months. The Transportation Security Administration announced on Oct. 19 that it’s screened more than 1 million passengers on a single day — its highest number since March 17. The TSA also screened more than 6 million passengers last week, its highest weekly volume since the start of the COVID-19 pandemic. While travel is improving, the TSA announcement comes amid warnings that the U.S. is in the third wave of the coronavirus. There are now more than 8 million cases in the country, with more than 219,000 deaths.

How are Americans feeling about their finances?

Nearly half of all Americans would have trouble paying for an unexpected $250 bill and a third of Americans have less income than before the pandemic, according to the latest results of our Marketplace-Edison Poll. Also, 6 in 10 Americans think that race has at least some impact on an individual’s long-term financial situation, but Black respondents are much more likely to think that race has a big impact on a person’s long-term financial situation than white or Hispanic/Latinx respondents.

Find the rest of the poll results here, which cover how Americans have been faring financially about six months into the pandemic, race and equity within the workplace and some of the key issues Trump and Biden supporters are concerned about.

What’s going to happen to retailers, especially with the holiday shopping season approaching?

A report out recently from the accounting consultancy BDO USA said 29 big retailers filed for bankruptcy protection through August. And if bankruptcies continue at that pace, the number could rival the bankruptcies of 2010, after the Great Recession. For retailers, the last three months of this year will be even more critical than usual for their survival as they look for some hope around the holidays.

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