Source Code: Your daily look at what matters in tech.

source-codesource codeauthorLauren HeplerNoneWant your finger on the pulse of everything that's happening in tech? Sign up to get David Pierce's daily newsletter.64fd3cbe9f
×

Get access to Protocol

Your information will be used in accordance with our Privacy Policy

I’m already a subscriber
People

Sheriff: Tesla must close its plant. Workers: It's business as usual inside.

As Tesla's factory continued to operate in defiance of Alameda County's orders, Elon Musk and officials appeared locked in a game of chicken.

The Tesla factory

The worker parking lots at Tesla's Fremont factory were full on Tuesday, despite county orders that all nonessential businesses cut back operations.

Photo: Lauren Hepler/Protocol

Updated on Wednesday, March 18, at 6:22 p.m. PDT: Alameda County officials said Wednesday that Tesla was reducing the active workforce at its Fremont factory, though questions remained, such as whether Tesla was still making cars or if the county considered it an essential business. More details in our rolling update.

As the rest of the Bay Area was hunkered down under an order to shelter in place on Tuesday afternoon, Tesla's hulking Silicon Valley factory, which employs 15,000 people, was bustling with workers.

When the afternoon line change hit, hundreds of men and women in all-black uniforms streamed out past a few idling food trucks. Some told Protocol there were few if any extra precautions being taken inside the factory. Many boarded double-decker charter buses — which, a worker said, have been limited to 50% capacity to separate riders, requiring more busses be added to the fleet — bound for rural bedroom communities 70 miles away. New workers, some dropped off by a shuttle driver wearing a face mask, arrived for their shifts.

But nearby at the Alameda County Sheriff's Office, officials were debating if and how to shut the factory down.


Get what matters in tech, in your inbox every morning. Sign up for Source Code.


On Monday night, CEO Elon Musk defied an order by the county and five surrounding local governments for residents to shelter in place and nonessential businesses to cease operating through April 7 to slow the spread of COVID-19. According to the orders, auto manufacturing does not fall into the category of essential businesses like grocery stores, gas stations and health care providers. But Musk and Tesla executives saw it differently, reportedly telling employees via emails that Tesla is critical to transportation and energy systems, so though workers could stay home if they wanted, the factory would remain open.

"We're letting them know, they're not an essential business," Alameda County Sheriff's Office spokesperson Ray Kelly told Protocol on Tuesday evening.

Local newspapers were reporting that Alameda County was shutting the factory down, but Kelly told Protocol there were no plans for the sheriff's office, which is granted enforcement powers by the county order, to do so by force. "Not going there tonight on that one," he said. "We're not gonna go down there."

The shelter-in-place orders are binding, punishable with a misdemeanor, but law enforcement officials in multiple counties have said they are hoping for voluntary compliance. By keeping the Tesla factory operating, Musk appears to be testing the limits of the county's idealism. Musk and local government officials are now locked in a game of chicken, with the rest of Silicon Valley waiting to see who will act first.

"They must comply with the order," Kelly reiterated. Tesla can only maintain minimum basic operations, per the county order, such as processing payroll and activities necessary to maintain the value of their business. "Unless they can get some type of exemption, that's the order," he said.

The question of what amounts to minimum basic activities is not totally clear cut, but there are obvious financial benefits to staying open. "This is a critical time for Tesla because of the Model Y launch," said Karl Brauer, executive publisher of Autotrader and Kelley Blue Book. "That car probably has more potential in terms of anything Tesla has ever launched."

But he added that businesses should be doing their part and following public health guidelines: "Tesla isn't alone in being a car company with a critical launch and facing delays because of coronavirus," he said.

It also wasn't alone in facing criticism about telling factory workers to stay on the job during a pandemic. The United Auto Workers, which previously tried to organize workers at the Tesla factory, on Tuesday called for other U.S. automakers to shutter their plants.

In Fremont on Tuesday afternoon, trucks filtered in and out of Tesla's delivery bays, and 18-wheelers loaded with new Model 3s peeled out of parking lots filled with rows and rows of cars wrapped in white plastic.

Workers wore black cargo pants, steel-toed boots and clear plastic protective glasses. A few workers leaving the factory wore masks over their noses and mouths — the only indication other than unusually light traffic that the rest of the county is on lockdown.

"It's been confusing, mostly. No straight answers," said one worker who asked not to be identified since he was not authorized to speak to the press. "They're keeping us on the hook day by day."

The factory was buzzing with rumors on Tuesday about why the factory was allowed to stay open, the worker said. Many guessed the company's recent record share price approaching $1,000 had something to do with it. (The price has fallen more than 50% in the past month.)

"It's the business possibility," he said. "And I want to say that's probably why the county is helping us stay open."

There was no indication the county was helping Tesla stay open, aside from not yet forcibly requiring the company to comply with the shelter-in-place order. Tesla did not respond to repeated requests for comment. Officials also did not answer questions about the factory at the governor's office, the Alameda County Public Health Department or the city of Fremont.

Health experts said the defiance could prove costly in California, where there have been 11 deaths and 740 confirmed cases of COVID-19. Some local hospitals are turning away patients requesting tests.

"I know Elon Musk has been a bit of a skeptic about the pandemic, but it's not a good look," said Carl Bergstrom, an infectious disease biologist at the University of Washington. "Ignoring shutdown orders is irresponsible and bad for society. I don't care if you're making cars that don't use gasoline."

Musk, who is known for brashly wading into public crises like a high-profile Thai cave rescue mission in 2018, has downplayed the threat of the virus. Last week, he called the panic "dumb" on Twitter. In an email to factory staff on Monday night, he offered his own pandemic projections, the Los Angeles Times reported.

"My frank opinion is that the harm from the coronavirus panic far exceeds that of the virus itself," Musk reportedly wrote. He guessed that COVID-19 cases "will not exceed 0.1% of the population."

"I will personally be at work, but that's just me," Musk wrote, but added, "I'd rather you were at home and not stressed, than at work and worried."

The next day, multiple workers told Protocol it wasn't an easy choice to come to work after the shelter-in-place orders were issued. Some took solace in masks they brought in or were able to buy in vending machines inside the factory. Others had heard the masks don't work or that doctors need them more. At least, they said, work stations are generally at least a few feet apart. They went to work because paid sick days are only available to some full-time workers, and Tesla — like many other large tech companies and manufacturers — employs a web of contractors, temps and full-time employees.

"I wouldn't get paid if I stayed home," one worker at the plant said on Tuesday. "With some full-time people, it depends if you get paid."

Other workers employed by Tesla contractors, such as the bus drivers who shuttle workers hours to and from work each day, also told Protocol that they are still driving normal routes. Thousands of factory workers commute from California's agro-industrial Central Valley, a region with average incomes less than half of Silicon Valley's affluent counties, and with more limited health infrastructure in rural areas.

Related:

Tesla was an outlier in sending its employees to work after the orders to curtail business activities. At Google and Facebook, where contractors had been working up until Monday morning as full-time employees logged in from home, emails sent late Monday told personnel they would be paid to work remotely.

And near the Tesla factory, Thermo Fisher Scientific's much smaller manufacturing operations remained in full swing, with parking lots full of workers' vehicles; however, because Thermo Fisher makes medical supplies, including crucial and necessary COVID-19 tests, it was operating in compliance with the county order.

Manufacturing cars was not in the same category, noted Michelle Mello, professor of medicine at Stanford's Center for Health Policy, Primary Care and Outcomes Research. She added that keeping Tesla's factory open posed a real risk for the larger community. "The broader the exceptions from the general order to shelter at home, the higher the prospects for community spread," she said.

Tesla's defiance of the order may not have been welcome news to the county or health experts, but market experts liked it. CFRA analyst Garrett Nelson raised his Tesla rating on Tuesday, encouraged by Musk's own statement that he would keep working through the pandemic.


Get in touch with us: Share information securely with Protocol via encrypted Signal or WhatsApp message, at 415-214-4715 or through our anonymous SecureDrop.


"You can kind of read through what's expected of workers if their boss is going to be there," Nelson said.

On the ground in Fremont, though Tesla's factory was bustling, life outside its campus had slowed to a trickle. Across the street at Taqueria Las Vegas, the red neon "open" sign was still on, but no customers were inside. A few workers had stopped in for lunch, a cashier said, but the business was one of many in the shadow of the factory staring down an uncertain future.

"This week, to-go only," the cashier said. "Next week, I don't know."

Protocol | China

China’s era of Big Tech Overwork has ended

Tech companies fear public outcry as much as they do regulatory crackdowns.

Chinese tech workers are fed up. Companies fear political and publish backlashes.

Photo: Susan Fisher Plotner/Getty Images

Two years after Chinese tech workers started a decentralized online protest against grueling overtime work culture, and one year after the plight of delivery workers came under the national spotlight, a chorus of Chinese tech giants have finally made high-profile moves to end the grueling work schedules that many believe have fueled the country's spectacular tech boom — and that many others have criticized as exploitative and cruel.

Over the past two months, at least four Chinese tech giants have announced plans to cancel mandatory overtime; some of the changes are companywide, and others are specific to business units. ByteDance, Kuaishou and Meituan's group-buying platform announced the end of a policy called "Big/Small Week," where a six-day workweek is followed by a more moderate schedule. In early June, a game studio owned by Tencent rolled out a policy that mandated employees punch out at 6 p.m. every Wednesday and take the weekends off.

Keep Reading Show less
Shen Lu

Shen Lu is a reporter with Protocol | China. She has spent six years covering China from inside and outside its borders. Previously, she was a fellow at Asia Society's ChinaFile and a Beijing-based producer for CNN. Her writing has appeared in Foreign Policy, The New York Times and POLITICO, among other publications. Shen Lu is a founding member of Chinese Storytellers, a community serving and elevating Chinese professionals in the global media industry.

Over the last year, financial institutions have experienced unprecedented demand from their customers for exposure to cryptocurrency, and we've seen an inflow of institutional dollars driving bitcoin and other cryptocurrencies to record prices. Some banks have already launched cryptocurrency programs, but many more are evaluating the market.

That's why we've created the Crypto Maturity Model: an iterative roadmap for cryptocurrency product rollout, enabling financial institutions to evaluate market opportunities while addressing compliance requirements.

Keep Reading Show less
Caitlin Barnett, Chainanalysis
Caitlin’s legal and compliance experience encompasses both cryptocurrency and traditional finance. As Director of Regulation and Compliance at Chainalysis, she helps leading financial institutions strategize and build compliance programs in order to adopt cryptocurrencies and offer new products to their customers. In addition, Caitlin helps facilitate dialogue with regulators and the industry on key policy issues within the cryptocurrency industry.
Power

Brownsville, we have a problem

The money and will of Elon Musk are reshaping a tiny Texas city. Its residents are divided on his vision for SpaceX, but their opinion may not matter at all.

When Musk chose Cameron County, he changed its future irrevocably.

Photo: Verónica G. Cárdenas for Protocol

In Boca Chica, Texas, the coastal prairie stretches to the horizon on either side of the Gulf of Mexico, an endless sandbar topped with floating greenery, wheeling gulls and whipping gusts of wind.

Far above the sea on a foggy March day, the camera feed on the Starship jerked and then froze on an image of orange flames shooting into the gray. From the ground below, onlookers strained to see through the opaque sky. After a moment of quiet, jagged edges of steel started to rain from the clouds, battering the ground near the oceanside launch pad, ripping through the dunes, sinking deep into the sand and flats.

Keep Reading Show less
Anna Kramer

Anna Kramer is a reporter at Protocol (Twitter: @ anna_c_kramer, email: akramer@protocol.com), where she writes about labor and workplace issues. Prior to joining the team, she covered tech and small business for the San Francisco Chronicle and privacy for Bloomberg Law. She is a recent graduate of Brown University, where she studied International Relations and Arabic and wrote her senior thesis about surveillance tools and technological development in the Middle East.

People

Facebook’s push to protect young users is a peek at the future of social

More options, more proactive protections, fewer one-size-fits-all answers for being a person on the internet.

Social media companies are racing to find ways to protect underage people on their apps.

Image: Alexander Shatov/Unsplash

Social media companies used to see themselves as open squares, places where everyone could be together in beautiful, skipping-arm-in-arm harmony. But that's not the vision anymore.

Now, Facebook and others are going private. They're trying to rebuild around small groups and messaging. They're also trying to figure out how to build platforms that work for everyone, that don't try to apply the same set of rules to billions of people around the world, that bring everyone together but on each user's terms. It's tricky.

Keep Reading Show less
David Pierce

David Pierce ( @pierce) is Protocol's editor at large. Prior to joining Protocol, he was a columnist at The Wall Street Journal, a senior writer with Wired, and deputy editor at The Verge. He owns all the phones.

Power

Who owns that hot startup? These insiders want to clear it up.

Cap tables are fundamental to startups. So 10 law firms and startup software vendors are teaming up to standardize what they tell you about investors' stakes.

Cap tables describe the ownership of shares in a startup, but they aren't standardized.

Illustration: Protocol

Behind every startup, there's a cap table. Startups have to start keeping track of who owns what, from the moment they're created, to fundraising from venture capitalists, to an eventual IPO or acquisition.

"Everything that happens that is a sexy thing that's important to the tech world, it really is something having to do with the cap table," said David Wang, chief innovation officer at the Wilson Sonsini Goodrich & Rosati law firm.

Keep Reading Show less
Biz Carson

Biz Carson ( @bizcarson) is a San Francisco-based reporter at Protocol, covering Silicon Valley with a focus on startups and venture capital. Previously, she reported for Forbes and was co-editor of Forbes Next Billion-Dollar Startups list. Before that, she worked for Business Insider, Gigaom, and Wired and started her career as a newspaper designer for Gannett.

Latest Stories