According to a report from a CBS affiliate in Wichita Falls, Tex., Texas Governor Greg Abbott told a local television reporter he had the opportunity to talk to Elon Musk and he’s genuinely interested in Texas and genuinely frustrated with California.
Tesla stopped making cars at its Fremont plant on March 23. Elon Musk shared frequently his views that the state and local restrictions aimed at mitigating the spread of the coronavirus were actually not in the best interest of California, the people of California, and not Tesla either.
Why is Tesla Fremont important?
Looking back in history, the GM automotive assembly plant in South Fremont used to be the town’s largest employer. In the 1980s, the plant became a joint venture automotive assembly plant of Toyota and GM, and renamed NUMMI becoming one of the most effective small car factories for GM. In early 2010, NUMMI came to an end and closed. Enter TESLA to rescue Fremont. Tesla acquired part of the plant and in June 2010 by Elon Musk earmarked it as Tesla’s primary production plant. By 2017, Tesla was the largest employer in Fremont with roughly 10,000 employees.
Ten years after Tesla swooped in and brought 10,000 jobs to Fremont, Elon Musk is not so happy.
Mayor Lily Mei released an official statement in favor of Tesla, sharing that she was “growing concerned about the potential implications for our regional economy.” She further added that “The City encourages the County to engage with our local businesses to come up with acceptable guidelines for re-opening our local economy.” Mayor Mei recognized that Tesla represents the single largest employer in her city. ( http://www.fremont.gov/CivicAlerts.aspx?AID=1768)
So it seems that the local government is supportive of Tesla, what is the issue?
Musk shared that Tesla is planning on relocating Tesla’s headquarters out of California citing that this was the last straw. On May 10th, Elon Musk tweeted:
Frankly, this is the final straw. Tesla will now move its HQ and future programs to Texas/Nevada immediately. If we even retain Fremont manufacturing activity at all, it will be dependen on how Tesla is treated in the future. Tesla is the last carmaker left in CA.
- Elon Musk (@elonmusk) May 9, 2020
Two days later on May 12th, Elon Musk Tweeted “ Tesla is restarting production today against Alameda County rules. I will be on the line with everyone else. If anyone is arrested, I ask that it only be me.”
As this epic showdown played out, there were divided responses. Some people said that they were canceling their Tesla order or they were going to unfollow Elon Musk on Twitter. The big question, what would Alameda county do? May 12th, Alameda County shared an update on Tesla via Twitter: “We received Tesla’s site-specific Fremont COVID-19 Prevention and Control Plan yesterday as anticipated. A site-specific plan is a part of the Governor’s guidance for reopening manufacturing.”
So it looks like disaster adverted, Tesla can stay put and make cars… right? Wrong. Dead wrong. Elon Musk apparently had a chat with the City of Houston. A May 15th letter released by Mayor Turner showed that Houston was very open to assisting Tesla shift production to Texas.
.@elonmusk Houston offers the #CompleteSolution to consolidate @Tesla and @SpaceX operations in one region. Join a city of innovators working to make the world better-just like you. #youbELONginHOU #HOUxTESLA
- Houston Mayor’s Office (@houmayor) May 15, 2020
Texas wasn’t the only state looking to attract Tesla. Other states are positioning to get Elon Musk and Tesla to move there.
My statement regarding Tesla considering Oklahoma for a new factory: pic.twitter.com/6vAuXkwLvy
- Governor Kevin Stitt (@GovStitt) May 15, 2020
Elon already has ties with Texas. SpaceX already has a launch site under development in Boca Chica Texas, near the southern border between the United States and Mexico. SpaceX has been using the Boca Chica facility to develop, test, and launch its new Starship. Elon is also already looking at Texas for a location to make its Cybertruck.
In early 2019, SpaceX canceled a lease with the Port of Los Angeles where SpaceX would build and manufacture its Starship. Since the rocket is so large, the port of L.A. could provide transportation by ship. SpaceX shifted its plans to Texas. There were talks about SpaceX leasing additional space at the Port of L.A., but the future looks rocky with California.
California turned down SpaceX’s proposal for $655,500 in job funding. In an explanation of the denial, spokesperson Gretchen Newsom shared “moved to deny the motion after raising concerns about wages, job retention and turnover and Musk’s recent threats to leave the state.”
With various parts of California still taking potshots at Elon Musk, it is likely that the feud will grow. SpaceX will unlikely leave California completely as it has a key customer, Space Force, and launch facility there. SpaceX and Tesla will probably think twice about future expansions in California based on Elon Musk’s experience.
What do you think? Is Elon Musk right to be pissed with California? Should Tesla and SpaceX move out of California?
Originally published at https://westeastspace.com on May 16, 2020.