Tesla suspends Fremont production to Mar. 23 amid coronavirus outbreak

Elon Musk, chief government officer of Space Exploration Technologies Corp. (SpaceX) and Tesla Inc., speaks throughout an occasion at SpaceX headquarters in Hawthorne, California, U.S., on Thursday, Oct. 10, 2019.

Patrick T. Fallon | Bloomberg | Getty Images

Tesla introduced Thursday it would briefly droop manufacturing at its Fremont, California manufacturing facility on the finish of the day on March 23. This comes after the county the place the manufacturing facility relies advised Tesla it would not be considered an “essential business” under the “shelter-in-place” order aimed toward tamping down on the unfold of the coronavirus.

Tesla shares fell about 9% after hours on the information.

Tesla stated fundamental operations on the plant would proceed “to support our vehicle and energy service operations and charging infrastructure, as directed by the local, state and federal authorities.” The firm can even briefly droop manufacturing at its manufacturing facility in Buffalo, New York in addition to that for elements and provides it stated are “necessary for service.” Tesla plans to make use of that facility to ramp up manufacturing of Solar roofs and associated gadgets. Operations at different services will proceed, the corporate stated in a press launch.

“Despite taking all known health precautions, continued operations in certain locations has caused challenges for our employees, their families and our suppliers,” Tesla stated within the launch.

In an e-mail to workers obtained by CNBC, Tesla Head of Human Resources for North America Valerie Workman stated the services would “transition to minimum basic operations to support our vehicle and energy service operations and customers, and Supercharging infrastructure, as directed by authorities” starting March 24.

Workman advised workers: “Hourly employees in the Bay Area and Buffalo factories will continue to receive their normal pay through Monday, after which point we will provide paid leave during suspended operations. Those who have been working from home should continue to do so and consider it business as usual.”

The e-mail didn’t point out Tesla’s warehouse and metering facility in Livermore, California, which can be a part of Alameda County, the place the shelter-in-place orders are in impact. CNBC reached out to the Livermore police division to search out out if that facility can even be required to scale back work to minimal fundamental operations.

Workers had been lobbying Tesla’s administration to close the plant, or at the least inform them what the corporate’s plans had been amid the COVID-19 pandemic. Earlier this week, they circulated a petition by way of Change.org. Tesla workers had been told Monday that factories were still open for business, although they might keep house in the event that they felt sick or uncomfortable. 

“I will personally be at work, but that’s just me. Totally OK if you want to stay home for any reason,” CEO Elon Musk wrote in an e-mail to workers Monday.

By Tuesday, the county sheriff said on Twitter that Tesla wouldn’t be outlined as an “essential business” beneath the order, throwing its operations into query.

Enough money for ‘prolonged interval of uncertainty’

The firm introduced Thursday it is usually making an attempt to implement “touchless deliveries” in sure areas, decreasing contact with Tesla staff through the coronavirus pandemic. 

“Due to the unique over-the-air connectivity of our vehicles, customers are able to unlock their new cars at a delivery parking lot via the Tesla App, sign any remaining relevant paperwork that has been placed in their car, and return that paperwork to an on-site drop-off location prior to leaving,” Tesla stated within the announcement.

Tesla stated it believes it has sufficient money available to get by this short-term closure. The firm stated it had a money place of $6.three billion on the finish of the fourth quarter of 2019 earlier than its current $2.three billion capital elevate. Tesla additionally stated it had about $three billion in accessible credit score traces on the finish of the fourth quarter of 2019.

“We believe this level of liquidity is sufficient to successfully navigate an extended period of uncertainty,” the corporate stated within the launch.

Here is the complete e-mail from Workman:

Hi Team

In the previous few days, we’ve met with native, state and federal officers and are persevering with to comply with all well being tips in our operations to maintain you protected. While we’re taking all advisable precautions and proceed to function as a nationwide important infrastructure as outlined by the federal authorities, continued operations in sure areas because of shelter in place restrictions have been difficult for our workers, our households and our suppliers.

As a consequence, we’ve determined to briefly droop manufacturing at our Fremont manufacturing facility from finish of day March 23. You ought to proceed to report back to your present location by finish of day Monday, as present operations will proceed over the following few days. Again, if you’re not feeling effectively or are involved about coming into the workplace, please contact your supervisor and keep at house. We respect your resolution.

Starting Tuesday, March 24 we are going to transition to minimal fundamental operations to help our automobile and power service operations and clients, and Supercharging infrastructure, as directed by authorities.

In addition, our manufacturing facility in New York will briefly droop manufacturing as effectively, aside from these elements and provides vital for service, infrastructure and significant provide chains. Production in our different services will proceed, together with operation of our service facilities and Supercharging community.

Hourly workers within the Bay Area and Buffalo factories will proceed to obtain their regular pay by Monday, after which level we are going to present paid go away throughout suspended operations.

Those who’ve been working from house ought to proceed to take action and take into account it enterprise as common. We perceive you’ll have many questions and we shall be offering you with further assets within the coming hours and days. Please get in contact together with your supervisor or HR companion for extra info. Thank you all so very a lot for all you do.

Valerie

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