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Tesla, Defying Local Order, Plans to Restart Factory: Live Business Updates


Elon Musk says Tesla is restarting production despite a county order.

Elon Musk, Tesla’s chief executive, said Monday that the electric-car company was resuming production at its assembly plant in Fremont, Calif., even though it had not yet been cleared to do so by the local health authorities.

“Tesla is restarting production today against Alameda County rules,” he announced on Twitter. “I will be on the line with everyone else. If anyone is arrested, I ask that it only be me.”

The county’s health officer has said he hopes to work out an agreement with Tesla to open the plant on May 18. The plant is Tesla’s main source of revenue and has been closed since early April. County officials have not yet authorized the resumption of indoor manufacturing over fears that the coronavirus could spread among large groups working in proximity.

In email that was sent on Monday and was reviewed by The New York Times, the company’s head of human resources in North America, Valerie Workman, told employees they would be contacted within 24 hours about when to report for work.

The state has authorized a resumption of manufacturing, Gov. Gavin Newsom said Monday that “we recognize localism” and that “if a county doesn’t want to go as far,” local orders would prevail.

Mr. Newsom said he understood that Tesla and local officials “had some very constructive conversations,” adding, “I’m certainly encouraged by what I’m hearing.”

But Mr. Musk’s brother, Kimbal, seemed unappeased, declaring Monday on Twitter, “The governor has enormous power. He chose to put it into the hands of the county and he can take back that decision. This is on @GavinNewsom entirely.”

In her email, Ms. Workman said employees uncomfortable returning to work could stay home on unpaid leave. She also said that “choosing not to report to work may eliminate or reduce” eligibility for unemployment benefits.

Global markets fell in early Tuesday trading, as reports from China, South Korea and the United States offered sobering reminders to investors of how long and difficult the coronavirus recovery is likely to be.

European markets opened mostly lower after a broad drop in the Asia-Pacific region. U.S. Treasury prices rose, signaling more investor unease. Futures markets were predicting that Wall Street would open less than 1 percent lower.

Investors had a menu of bad news to choose from. Dr. Anthony S. Fauci, a central figure in the American government’s coronavirus response, was expected to warn U.S. lawmakers later on Tuesday that “needless suffering and death” would result if the country opened up too quickly. In China, the city of Wuhan, which seemed to have tamed its outbreak, has reported six new infections in recent days, while cases have also risen in the northern part of the country. That followed a disclosure over the weekend that South Korea, which has also seen success, had suffered a spate of new infections as well.

In Japan, the Nikkei 225 fell 0.1 percent. Hong Kong’s Hang Seng index was down nearly 1.5 percent. The Shanghai Composite index in mainland China lost 0.1 percent. South Korea’s Kospi dropped 0.7 percent. Australia’s S&P/ASX 200 index fell 1.1 percent.

In London, the FTSE 100 index was up 0.3 percent in early trading. But Germany’s DAX was down 0.1 percent, and France’s CAC 40 was flat.

Three months after the Chinese authorities virtually shut down the country to stop the outbreak, its workers are back at their jobs. If factories and offices can successfully restart without major infections, China’s approach could serve as a model for President Trump and other leaders who want to get their economies back on track.

Major companies are asking workers to change their daily personal habits as well as their workplace conduct. BMW workers take their own temperature three times a day. Foxconn, the Taiwanese electronics giant that makes iPhones and other Western-branded gear in vast Chinese factories, has advised employees in a handout to avoid public transportation and walk, bike or drive instead. A ride-share driver wipes down his car daily and sends video proof to headquarters.

Many employers have embraced government-endorsed health code functions recently built into some of China’s most popular smartphone apps, like Alipay and WeChat. One of the first services built to gauge a person’s infection risk, the health code function tracks users’ travel to see whether they have been to areas with high infections, though the creators and the Chinese government have not disclosed full details about how it works. When prompted by health workers, police officers or security personnel, a person would display a code colored red, yellow or green.

Everyone agrees on one thing: There is no going back to life before the pandemic.

“Life will not become like it was before,” said Johann Wieland, the chief executive officer of BMW’s joint venture in China, which employs 20,500 people. “This is what we have to learn.”

The blacklisting of the processors follows a threat made last month by China’s ambassador to Australia, Cheng Jingye, who called the inquiry proposal a “dangerous” move that could lead to a Chinese boycott of beef, wine, universities and tourism.

In a joint statement, Australia’s trade and agriculture ministers said the beef suspensions appeared to be based on highly technical issues.

“We’ve been speaking with industry leaders, colleagues and departments overnight,” the ministers said, adding that they were working with Chinese officials to “find a solution that allows these businesses to resume their normal operations.”

If the ban continues, the economic cost could be severe. Beef sales to China were worth $1.85 billion in 2019, up from $883 million in 2018.

Trade experts said that while small disputes over certification and other issues are a common feature in bilateral relations, China may also be signaling its discontent after a period of growing frustration that started before the pandemic. Australia has accused China of dumping steel, banned the Chinese companies Huawei and ZTE from supplying its 5G network and passed laws against foreign interference in its politics.

The beef ban, announced on Sunday night, arrived on the same day that the Chinese government warned of its plans to impose a tariff of up to 80 percent on Australian barley in relation to an anti-dumping investigation that began 18 months ago.

“It’s China trying to send a political signal that Australia needs to reconsider its position in foreign affairs,” said Weihuan Zhou, a senior lecturer in international law at the University of New South Wales. “I don’t think there will be a change to the current situation unless there is a dramatic political change in Australia.”

The United States is on the brink of the worst economic collapse since the Hoover administration. Corporate profits have crumpled. More than a million Americans have contracted the coronavirus, and hundreds of people are dying each day.

After a few weeks of wild swings, the market is down roughly 9 percent this year and a little more than 13 percent from its peak. Even as 20.5 million people lost their jobs in April, the S&P 500 stock index logged its best month in 33 years. The index was basically unchanged on Monday.

Conventional wisdom would explain the market’s comparatively modest losses this way: Because markets tend to be forward-looking, investors have already accounted for what’s expected to be a cataclysmic drop in second-quarter activity and are forecasting a relatively rapid economic recovery afterward.

But for decades, the market has been growing increasingly detached from mainstream of American life. There are a few reasons:

  • The giant companies that make up the S&P 500 operate under very different circumstances than the nation’s small businesses, workers and cities and states. They are highly profitable, hold significant sums of cash and have regular access to public bond markets.

  • Stock ownership is heavily skewed to the richest segments of the population, who are least likely to feel the pain of an economic downturn.

  • The Federal Reserve’s actions have also bolstered investors’ confidence that the bottom won’t fall out of the market.

Americans have long relied on the stock market as a proxy for the U.S. economy. The current economic fallout, however, could snap any illusions that the logic of the market is derived, in any consistent way, from real-world events.

Catch up: Here’s what else is happening.

  • Steak ‘n Shake permanently closed 57 restaurants in the first quarter because of the coronavirus pandemic, the company’s parent, Biglari Holdings, said in its quarterly earnings report. Biglari, whose properties include Western Sizzlin restaurants, Maxim magazine and First Guard Insurance, reported that revenue fell to $136 million in the first quarter, from $182 million the same quarter a year earlier. The company had 605 company-operated and franchise Steak ‘n Shake and Western Sizzlin restaurants as of March 31.

  • Hyatt, a hotel chain, said it would lay off 1,300 workers and restructure roles because of “the historic drop in travel demand and the expected slow pace of recovery.”

Reporting was contributed by Niraj Chokshi, Alexandra Stevenson, Cao Li, Damien Cave, Matt Phillips, Gregory Schmidt, Carlos Tejada and Daniel Victor.

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