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Detroit automakers will reportedly shutter factories—but not Tesla

People in light protective gear work on trucks.
Enlarge / A General Motors assembly line in Flint, Michigan, in 2019.

The nation’s “Big Three” automakers (General Motors, Ford, and Fiat Chrysler) will shut down their factories for at least two weeks, reports indicate. The Associated Press first broke the news, which was confirmed by The Wall Street Journal.

The United Auto Workers has been pushing for plant closures for days. The union has argued that continuing to manufacture cars during a pandemic puts US autoworkers’ lives at risk. But as recently as Tuesday evening, carmakers and the UAW were still hashing out a plan to make automaking safer by limiting work hours and physically spreading out workers.

Union leaders’ hands may have been strengthened by news that two autoworkers—one with Fiat Chrysler, the other with Ford—had tested positive for coronavirus.

A big concern here is that the new coronavirus is capable of asymptomatic spread. So if one person tests positive for coronavirus in a particular factory, there’s a risk that other workers have caught the virus but haven’t yet shown symptoms.

Tesla: “conflicting guidance”

Meanwhile, Tesla appears to be defying officials in Alameda County, California—the site of its only North American factory, in Fremont—who have ordered Tesla to stop operations. TechCrunch reports that a Wednesday email from the company’s human resources department instructed employees to come to work.

“We still do not have final word from the city, county, state and federal government on the status of our operations,” the email said. “We have had conflicting guidance from different levels of government.”

In an email published Tuesday by Eletrek, Tesla’s head of HR argued that Tesla didn’t need to shut down because the company counts as National Critical Infrastructure, as defined by the Department of Homeland Security. The category “includes auto manufacturing and energy infrastructure,” according to Tesla.

“People need access to transportation and energy, and we are essential to providing it,” the email said.

Tesla evidently believes that its interpretation of this DHS guidance supersedes the instructions of Alameda County officials to shut down. It remains to be seen if Alameda County officials agree.

Wall Street has been hammering the stocks of US carmakers. As I write this, Ford’s stock is down 16 percent from Tuesday’s close. GM is down 23 percent. And Tesla’s stock is down by 16 percent. All of these losses are substantially larger than today’s 8 percent decline in the broader stock market.

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