Tesla closed major factories in both California and Nevada, and now it's releasing hundreds of contractors who ran them.
CNBC reports that staffing agencies notified contractors to stop appearing at the manufacturing facilities due to their extended closures amid the coronavirus outbreak. Since they're set to remain closed indefinitely, Tesla made the decision to reduce costs and cancel contractors' assignments. It could take several months for the factories to reopen.
Tesla used the factory in Fremont, California, to manufacture its electric vehicles. Out in Reno, Nevada, it operated the 'Gigafactory 1' responsible for designing batteries that go inside the cars and Tesla's energy storage products. Both act as vital to Tesla.
"It is with my deepest regret that I must inform you that the Tesla factory shutdown has been extended due to the COVID-19 pandemic, and as a result, Tesla has requested to end all contract assignments effective immediately," Balance Staffing told contractors.
Tesla tried to continue operating the Fremont-based location while battling local officials. It manufactured electric vehicles at full capacity until March 23, roughly one week longer than other businesses in Alameda County could remain open. Now, it's closed in accordance with the local health order as a nonessential business.
On Friday, Tesla shared that it delivered more than 88,000 vehicles in Q1 2020. Tesla also manufactured 103,000 vehicles during the same quarter. Production could take a significant drop after the recent closures, though, and impact future availability of Tesla's electric vehicles and batteries.
Staffing agencies aren't sure when Tesla will reopen the manufacturing facilities, but Balance Staffing did tell its affected contractors that they're committed to reassigning them to the car and battery factories if possible. Tesla needs to wait until the global pandemic gets under control. Currently, some health experts suggest the coronavirus outbreak will peak in the U.S. sometime in late April. Should the disease lose momentum, Tesla and other companies could reopen their workplaces a few weeks later and resume operations.
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