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Musk and California break up, local officials: You took so many benefits back then, but now you are ungrateful

2024-07-24

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July 24 news, recentlyTeslaCEO ElonMuskElon Musk is clamoring to move the headquarters of SpaceX and social media platform X fromCaliforniaMove toTexas, citing dissatisfaction with California's public policies. But the California government believes that Musk is simply ungrateful and has forgotten how he got rich.

The following is the translation

Like many people, Elon Musk came to California in search of fame and fortune.

Musk arrived in Silicon Valley during the first dot-com boom in the 1990s and began amassing his fortune by founding startups such as messaging network Zip2 and payments site Paypal.

Then he moved into new areas: space and electric cars. Musk's Tesla electric cars benefited from consumer subsidies in California, while SpaceX thrived in Southern California, a growing center for space technology.

Musk is a firm believer that technology can solve all problems. Dissatisfied with the long commute from his home in Bel Air to SpaceX headquarters in Hawthorne, he proposed building an underground tunnel that would transport commuters at 210 kilometers per hour on underground electric platforms. Although his company, The Boring Company, abandoned the plan in 2018, tunnel construction in other American cities continues.

However, in recent years, Musk has taken an increasingly negative view of California, which he has accused of being "over-regulated, over-litigated, and over-taxed."

He said the "last straw that broke the camel's back" was a law that "prohibits schools from requiring teachers to report changes in students' gender identity to parents."

Musk expressed his displeasure this month by announcing plans to move the headquarters of two of his companies, SpaceX and X, the social media platform formerly known as Twitter, from California to Texas.

But critics called Musk's comments inconsistent, noting that the billionaire has benefited over the years from the bounty of California, including strong government support, green awareness and a highly skilled workforce.

“California helped Musk succeed through tax credits, electric vehicle subsidies and training grants,” said Lorena Gonzalez Fletcher, executive secretary-treasurer of the California Labor Federation. “This is 'taxpayers spent hundreds of millions of dollars while he continues to insult California workers and taxpayers.'”

Edward Niedermeyer, author of "Ludicrous: The Unvarned Story of Tesla Motors," said Musk has always enjoyed California's largesse with a clear conscience, accepting it when it suits his interests and withdrawing when he thinks the time is right.

“I think Musk has calculated that he’s gotten all the benefits he can from California and is now looking elsewhere,” Niedermeyer commented. “California expected their investment to buy Musk’s loyalty, but this has led him to feel that he deserves these benefits.”

Musk announced his plans to move the headquarters of both companies out of California via the social media platform X shortly after California Gov. Gavin Newsom signed a law protecting the rights of transgender students, which some parents say undermines family authority.

Musk said California was "attacking homes and businesses" by passing this law and others before it, prompting him to move SpaceX's headquarters to its launch test site in Texas.

In another message on X, he said he had told Gov. Newsom explicitly about a year ago that such a law would force families and businesses to leave California to protect their children.

In another X post, Musk said he was moving X's headquarters from San Francisco to Austin, and said he was tired of dodging violent drug addicts to get in and out of the building.

Musk has frequently and publicly criticized California, a refrain that has become a common refrain on the right in recent years.

But some California officials viewed Musk's comments as ungrateful given the state's unstinting support for Tesla and SpaceX. In the past, the tech billionaire has stood by Newsom and touted business expansion in the state. But the news of plans to move both companies' headquarters to Texas marks a low point in their relationship.

After the announcement, Newsom shared a screenshot of a tweet from former President Trump in 2022, in which Trump claimed that Musk wanted the federal government to provide subsidies for Tesla and SpaceX so badly that "I could even say 'get on your knees and beg me' and he would do it."

Newsom commented on X: “You took your knee.” Musk fired back: “You never stood up.” In another X post, Musk added: “Gavin’s political career is over.”

The California Governor's Press Office issued a notice suggesting that Musk's statement about leaving California was not sincere. "The last time Musk announced a 'relocation' of the headquarters, Tesla actually expanded its operations in California.Palo AltoA new engineering center has been established.” The governor’s camp said this is because “we have a diverse and world-leading talent pool.”

Musk’s relationship with California over the years has been mostly positive. He joined Tesla soon after it was founded in San Carlos, California, and in 2002 he established SpaceX’s first headquarters in a warehouse in El Segundo.

In 2015, Musk's three companies - Tesla Motors, SolarCity and SpaceX - received a total of about $4.9 billion in government support.

The figure is derived by aggregating various government incentives, including subsidies, tax breaks, factory construction, preferential loans and environmental credits that Tesla can sell. It also includes government tax credits and rebates for consumers of solar panels and electric vehicles.

Early last year, Newsom said Tesla had received $3.2 billion in government grants over its two-decade history, and he saw the support as valuable in promoting cars without tailpipe emissions.

But Musk's relationship with California leaders has deteriorated significantly during the COVID-19 pandemic.

In 2020, in order to prevent the spread of the epidemic, many businesses and public facilities in California were closed, including Tesla's factory in Fremont in the San Francisco Bay Area.

Musk called the stay-at-home order "fascist". Tesla fought to keep its factory running, claiming that electric vehicles are vital to national security. But Alameda County, where it is located, disagreed, arguing that Tesla did not meet the criteria for reopening.

At the time, Musk also called this the "last straw" and announced that Tesla's "future business" would be moved to Texas and Nevada.

Then-state Assemblyman Gonzalez Fletcher attacked Musk on social media, adding: "California has massively subsidized a company that has long disregarded worker safety and well-being, busted unions, and bullied public servants."

Musk, who is moving Tesla's headquarters to Austin and hinting at the possibility of closing the massive Fremont factory, wrote on social media: "Whether we continue manufacturing in Fremont will depend on how Tesla is treated in the future."

The Fremont factory is still in operation today, and Tesla's website describes it as "one of the largest manufacturing sites in California."

Musk continued to publicly criticize California in 2022. He admitted in a podcast interview that most of his friends were in California, but he complained that the government was too authoritarian and called Newsom "moving salesman of the year."

However, last year, as Tesla opened its new engineering headquarters in Palo Alto, Musk and the governor's relationship appeared to improve. Newsom praised Musk and touted the state's deep engineering talent pool. The two also joked with each other, with Newsom saying he was an early Tesla buyer.

However, friction between California and Musk's companies has persisted.

In 2022, California's Department of Fair Employment and Housing complained that Tesla's Fremont factory was actually a racially segregated workplace where black employees suffered harassment and discrimination in job assignments, discipline and pay.

California is also trying to crack down on Tesla's claims that some of its cars have self-driving capabilities.

The California Department of Motor Vehicles prohibits the advertising of cars as “self-driving” if they don’t have self-driving capabilities. However, when those rules were not strictly enforced, the state legislature elevated anti-false advertising rules to state law. As a result, Tesla was formally charged last year for its misleading marketing.

Last year, California lawmakers passed a law aimed at increasing transparency on social media platforms. Under California Assembly Bill 587, Facebook and other platforms must make public their policies, including what content users are allowed to post and how they respond when violations occur.

In a lawsuit filed in federal court, California Sen. X said the law violates free speech protections in the First Amendment and would force social media companies to censor speech that the state of California deems "unwelcome or harmful."

Musk has also recently criticized California's education policies after it was reported that he blamed his estrangement from his transgender daughter on the education she received at Crossroads, a K-12 school in Santa Monica.

Last week, Musk continued to express his dissatisfaction with the law. He wrote on X: "This evil law is designed to destroy the parent-child relationship and give the government control over your children." In a subsequent interview with clinical psychologist and podcast host Jordan Peterson, he said he was "tricked" into agreeing to his son's use of puberty blocking drugs. His son has transitioned to female, and Musk said his child was actually "killed by the awakening virus."

California officials have previously denied that the state is responsible for friction between parents and children over gender issues. California Senator Scott Wiener wrote on X before Musk's interview with Peterson: "Musk is a classic example of why children should not be forced to be open with their parents about their sexual orientation."

Niedermeyer said that despite Musk's repeated protests, California has not taken serious action against his company's negligence. He also predicted that Musk is likely to move the headquarters of both companies to Texas.

But it's unlikely that Musk will completely abandon California.

Given Musk's companies' heavy investments in California and the fact that many engineering and technical workers live here, "having that talent is very important for a lot of the things they want to do," Niedermeyer said. "That talent is often already in California or wants to live in California," he added.