Tesla's Threats Worked

Textbook bullying by a big company and compliant politicians could put workers in danger.

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Tesla CEO Elon Musk — one of the leading proponents of a rush back to businesses from the coronavirus pandemic — wanted to re-open his company’s factory in Alameda County, California. The county, though, wouldn’t give him permission, as it had not lifted its closure order for manufacturing facilities.

What happened next is a textbook example of how corporations, aided by pliant politicians competing for jobs, put workers in danger and let corporations run roughshod over public health and safety.

First, Musk sued the county. Then he threatened to take future manufacturing plants and Tesla’s California headquarters to other states “immediately” if his desires weren’t met. “If we even retain Fremont manufacturing activity at all, it will be dependen [sic] on how Tesla is treated in the future,” he said on Twitter.

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This is a common tactic used by big corporations in order to win taxpayer subsidies and favorable regulatory treatment. And of course, politicians across the country leapt at the bait. Here’s Colorado Democratic Gov. Jared Polis:

Lawmakers in Texas, Nevada, Georgia, Utah and Oklahoma also said Musk should ditch the Golden State for their own. Other California officials, likely worried about getting on the wrong side of a big company, took Tesla’s side over that of Alameda County.

Musk then brazenly re-opened the factory, daring officials to stop him and having the company pressure workers into returning. Inevitably, the county gave Musk permission to start up operations again.

He took his own workforce hostage, and it worked.

At the best of times, trying to woo big corporations to move operations via government favors is destructive economic behavior that results in a race to the bottom among states, giving companies the power to demand anything, even if it hurts workers and the public coffers.

Now, with the coronavirus pandemic ongoing, it’s even more dangerous, because workers are put at risk when corporations rush re-opening before the virus is under control. But that inter-state competition gives them leverage over public health officials.

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Alameda County officials say they’re working with Tesla to implement practices that will keep workers safe — but at least some workers are not convinced. And they have reason to be concerned, as factories have been hard hit by coronavirus outbreaks. Even with safety precautions, the tight working conditions make them the ideal setting for disease transmission. (Also, it’s not like working at the Tesla plant in question was a day at the park before the pandemic.)

As I’ve noted before, Musk has made an art form of pushing local officials around by shopping his company’s wares across the country. It’s blown up in the face of several communities, but more keep lining up. He’s currently searching for a location for a new truck factory, for which Joplin, Missouri, already bid $1 billion in state and local incentives.

And long before the pandemic, companies that balked at health guidelines found politicians in other communities willing to sicken their own constituencies in the name of big business.

Sure, it’s impossible to know the extent to which California officials were honestly convinced that Tesla’s factory can operate safely versus prematurely granting it permission to open because they were scared Musk’s threats to move production elsewhere were serious.

But that’s exactly the problem: Because states engage in a competition for corporate favor they can’t win, CEOs drive the agenda — in this case, even if means workers literally get sick and die in the name of reviving commerce. If anything happens to any of Tesla’s workers, of they transmit the virus to a family member, part of the blame surely lies with the politicians who encouraged Musk’s behavior.

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One more thing: I co-wrote a piece for The Guardian with Zephyr Teachout, the Fordham Law professor who ran for New York governor in 2014, on why New York’s plan to outsource post-pandemic planning to a couple of billionaires is so problematic. Check it out here.


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— Pat Garofalo