Elon Musk vs. Bay Area officials: These emails show what happened behind the scenes in the Tesla factory fight

Kimberly Petersen, chief of police for Fremont, Calif., suspected Elon Musk would not stand by quietly as public health officials idled his Tesla factory.

“We know where this will go,” Petersen wrote in a March 21 email to other local officials, seen by MarketWatch, that detailed her “ongoing conflict with a large and prominent auto manufacturer” in the city, more than a month before Musk decried the COVID-19 closures as “fascist.”

The email is part of a batch of communications that detail what took place as Musk took public his fight with Bay Area officials and threatened first to reopen the factory without permission and then to move California’s only large auto manufacturer out of the state entirely.

Tesla TSLA, +3.62% continued to operate the factory even after the San Francisco Bay Area became the first large region in the U.S. to issue a shelter-in-place order, claiming a federal exemption to the shutdown. Fremont police eventually convinced Tesla to close its factory, two days after Petersen sent the email to local officials, but Gov. Gavin Newsom then included the same “critical infrastructure” exemption in his statewide order.

“I am more than willing to continue this current course of action, but I need to know your stance on the issue before I engage in a very public fight,” Petersen told Alameda County Interim Health Officer Erica Pan and other local officials in the March 21 email reviewed by MarketWatch.

In a dayslong tweetstorm in early May, Tesla’s chief executive called Pan “ignorant” and announced he was defying regulators and putting the factory back online. “If anyone is arrested, I ask that it only be me,” Musk tweeted.

As Petersen predicted, Tesla cited the federal and state exemptions for certain manufacturing work in attempting to reopen. The company sued Alameda County for not allowing the factory to reopen in Fremont, which is located 40 miles east of San Francisco.

Petersen would have been the official to arrest Musk, but she chose not to use her handcuffs. Instead, she worked with local and Tesla officials to determine and then enforce the criteria that Tesla would have to establish in order to reopen the factory, emails between local officials show.

Musk wasn’t directly involved in the correspondence, which were largely civil exchanges between three women who worked for Tesla, the city and county — Petersen, Pan and Tesla vice president for environment, health and safety Laurie Shelby. The calm approach apparent in the emails contrasts with Musk’s brash public style.

Petersen, reached at her desk phone this week, declined to comment on the particulars of the exchange, other than to say the relationship between the city police and Tesla had been professional but “not particularly close.” Tesla did not respond to multiple requests for comment over the course of a week.

Petersen was the only local official or Tesla staffer identified in the emails to speak with MarketWatch for this article, but the communications show she and the Fremont Police Department played a crucial role in a local dispute that became national news. Peterson became a buffer between Tesla and Alameda County, and led the agency that would eventually confirm and enforce rules meant to keep Tesla’s Fremont factory from becoming the nexus of a second wave of coronavirus in the Bay Area.

Musk lashes out on Twitter

After Musk reportedly sent an email to employees on Thursday, May 7, stating that he expected to restart production on Friday afternoon, Fremont police contacted Tesla about its plans to reopen the factory on Friday evening, according to emails between Fremont Police Lt. Brian Shadle and Dan Chia, a senior policy adviser for Tesla.

“Over the past week, I have received several complaints that Tesla was in fact violating the Alameda County Health Order by ordering their employees back to work to re-open the production line,” Shadle wrote in an email in which he requested to visit the site “to meet with you about this potential violation and inspect the facility.”

The next morning, May 9, Musk hurled insults on Twitter, announcing a lawsuit against Alameda County and calling Pan an “unelected and ignorant ‘interim health officer’.”

For more: Elon Musk threatens to move Tesla out of California, files lawsuit

Musk, whose child with pop singer Grimes was born just five days earlier, then threatened to move his company to another state, igniting a much larger media and political firestorm that even brought out governors seeking to woo the company and a California politician with a less diplomatic message.

The emails show that Musk’s outburst likely stemmed from a discussion between Petersen and Tesla officials, though Petersen declined to confirm details of any specific conversations. An hour after Musk’s first tweet, Petersen sent an email to county officials that announced “I have verbally notified [Tesla] that auto manufacturing is still not allowed.”

Tesla was very likely to continue “working toward restarting production anyway,” Petersen wrote to Pan and other officials. “Unfortunately it appears we may have to move into an enforcement phase.”

Pan’s response three hours later did not mention Musk or his personal attacks. “We are working with Tesla to develop a safety plan to safely reopen, and we are issuing a public statement about this today,” Pan wrote.

“I think that is a great resolution. Thank you for finding a way forward,” Petersen responded.

The next day was Mother’s Day. At roughly 7 p.m. Pacific time, the county’s dispatch center received a call from the Tesla factory requesting paramedics be dispatched, according to records reviewed by MarketWatch. The Fire Department paramedics rendered advanced life support on a an unidentified person, but the county redacted the reason for the call — including the audio recording — and has refused to say anything more.

Fremont police receive anonymous complaint about Tesla factory safety

The next morning, Fremont police received an emailed complaint from an unidentified person who said they worked at the Tesla plant in a team getting newly made cars onto trucks for delivery. Because of the nature of the job, the person wrote, there was no way workers could keep social distance, and the auto maker was building cars during the night shift in defiance of the county order.

“It is clear to my colleagues and I that Tesla does not care about the safety of its employees,” the tip said.

Petersen forwarded the email to Alameda health officials and the city attorney, among others, that Monday afternoon. “This is something that should be considered as part of the safety plan,” she wrote.

A half-hour later, Musk tossed a Twitter grenade into the plans being constructed behind closed doors, openly admitting that he was restarting production at the factory in defiance of the county order.

Just two hours later, public health officials sent Tesla a letter demanding the company stop production. The letter was sent to Tesla executive Laurie Shelby by Colleen Chawla, director of the Alameda County Health Care Services Agency, who then shared the contents with Petersen and Fremont Mayor Lily Mei.

“We have heard reports from several sectors today that Tesla has reopened its Fremont plant and may have recommenced normal operations,” Chawla began.

“If the reports we have received are true, Tesla is engaging in work beyond Minimum Basic Operations, and is in violation of the Health Officer Order,” Chawla wrote. “These activities must cease until the Health Officer approves Tesla’s site-specific plan as required by the State of California guidance and checklist for manufacturing, and issues an order permitting manufacturing generally.”

The letter repeatedly references prior discussions between Shelby -- Tesla’s vice president for environment, health and safety -- and the Alameda County Public Health Department, mentioning “productive discussions” and “working collaboratively over the last two weeks.”

“Per our communication of earlier today, you will be submitting Tesla’s site-specific plan to me later today. We will review that plan once we receive it and will schedule time to review our feedback with you within 24 hours,” Chawla concluded.

Roughly 30 hours later, the two sides had an agreement — Tesla would be allowed to reopen if it instituted changes to its plan on which the two sides agreed in negotiations. The county has not responded to a MarketWatch records request for Tesla’s final reopening plan and has denied access to other media outlets

The last important step was for Fremont police to investigate Tesla’s preparations to ensure they lived up to the promises made to the county, which Pan outlined in an email to Petersen on Tuesday evening.

Police inspect safety measures at Tesla factory

Pan requested police ensure several specific precautions were being taken, including screening of employees entering the facility, frequent cleaning and disinfection of high-touch surfaces, and ensuring employees wear masks and maintain physical distancing.

“My understanding is they only plan to have ~10% of their employees (~1500 employees during day shift) working this week to begin to prepare for increased operations as soon as next week,” Pan wrote.

For more: What Wall Street is watching for after end of Tesla factory standoff

The next afternoon, Lt. Shadle and another officer arrived at the Fremont factory at 4:20 p.m. Pacific, and found a bit more activity than what Pan expected.

“During the visit it was extremely apparent that the manufacturing plant was NOT operating at full capacity it appeared that they were only operating between 25-30 percent of functions,” Shadle wrote.

The rest of Shadle’s report noted changes to employee shuttles, extensive hand sanitizer and personal protective equipment readily available, and abundant signage regarding social distancing and proper procedures during a nearly two-hour tour.

“The facility is huge and overall the safety measures that have been instituted exceeded the safety measures outlined by the Alameda County Health Department,” Shadle concluded.

“I am impressed at the length of the visit and the details of the report,” Pan wrote in response to the report. “I realize this is not typical law enforcement work so I greatly appreciate the time, detail, and assistance.”