Elon Musk opened the headquarters of SpaceX and SpaceX this week. California The move to Texas marked the culmination of years of conflict between the hot-headed CEO and the state where his company was founded.
Just a year ago, Musk declared that X would not move its headquarters from San Francisco. in spite of San Francisco, he claimed, was in a “spiral of ruin.” He wrote at the time: “Only when you are in dire straits do you know who your friends really are. San Francisco, beautiful San Francisco, we will always be your friends, even when others have abandoned you.”
But now Musk has changed his tune, citing a new law banning mandatory transgender notification in California schools as the reason for his resignation in a series of angry tweets on Tuesday. “The Governor of California just signed a bill that will drastically destroy parental rights and expose children to permanent damage,” he wrote. To tell The bill “attacks both families and businesses,” he said. He responded to another tweet about leaving California with “many more will follow suit,” then share It was a seemingly Photoshopped or AI-generated image of himself in a cowboy hat, captioned “Texas.”
Executives have long been unhappy about doing business in California, state While California has become a land of “taxes, over-regulation and lawsuits” in 2022, experts say the timing of the announcement suggests it’s more than just an economic choice: It comes just days after Musk fully endorsed Trump and said he would donate $45 million a month to a super PAC backing the former president.
“He’s making a political calculation,” said Sarah Kreps, a policy analyst and political science professor at Cornell University. “If he’d made this decision at a different time, it would have been a different story. This is part of a larger message he’s trying to send about politics and about his own politics.”
Musk’s uneasy relationship with the state of California is well known. The tech mogul launched SpaceX in the Los Angeles metropolitan area of Hawthorne in 2002 and has enjoyed numerous tax breaks and incentives over the years. Since 2009, he has received more than $3.2 billion in direct and indirect subsidies and favorable adjustments to market mechanisms from the state, according to figures from Gov. Gavin Newsom’s office.
Though symbolic, the move is likely to reignite a long-running debate about San Francisco’s “doom loop” — the idea that the City by the Bay is in an unstoppable decline. X, with its 800,000-square-foot headquarters on Market Street in downtown San Francisco, was one of the few companies with large facilities in the area. Since 2019, the 20 largest tech companies have Sliced to pieces The amount of office space available for lease in downtown San Francisco has been cut in half, and earlier this month Twitter began seeking subleases for its offices.
Downtown San Francisco has been trying to reverse urban blight for nearly 15 years. X (formerly Twitter) benefited from tax breaks enacted in 2011 to attract businesses to San Francisco’s Mid-Market district, which has long struggled economically. The law expired in 2019, and X’s departure could be yet another blow to the area. 46% of offices and 40% of retail space Vacant. Other companies gone Companies that have downsized or launched offices in San Francisco in 2021 and beyond include Meta, Salesforce, Snap, Lyft, Block, Airbnb, and Paypal.
Many of the employees and customers of Musk’s companies are inevitably CaliforniaExperts say the moves are largely symbolic. Musk previously moved electric car maker Tesla’s headquarters from California to Texas in response to the state’s coronavirus restrictions. He clashed with regulators over keeping the factory open despite the pandemic, calling the state’s move “fascistic.” But today, Tesla has several factories in California, including the Gigafactory in Fremont, California, one of the company’s largest manufacturing sites.
“As long as these companies maintain an economic presence in California, the state is going to have influence over them,” said Eric Tully, a professor of corporate law at Columbia Law School. “If they wanted to completely cut themselves off from the state, they’d have to not only relocate their headquarters, but also stop selling and manufacturing in California, and I’m not sure that’s going to happen.”
How the changes will unfold SpaceX SpaceX has more office mandates than other tech companies because Musk has insisted employees work in person. After he bought SpaceX in 2022, Musk ordered nearly all employees to return to the office full time, calling for them to be “very hardcore.” SpaceX has also mandated that employees work from the office.
Musk’s announcement and attacks on Newsom X The remarks sparked an exchange between Musk and the California governor, who tweeted “You took a knee,” implying that Musk had pledged allegiance to Trump, to which Musk responded, “You never take a knee.”
Experts say even if Musk were to change his political mind, it would be difficult for him to convince most of his and SpaceX’s employees to move from California, a relatively liberal, tech-centric haven, to a Republican-leaning state. Texas“It’s easy to move a company’s headquarters,” Tully said. “But it’s not so easy to move your employees.”
“It takes a lot of work to upend a comfortable, networked place, to bring in people who are rooted in this area and who, frankly, may be at odds with Texas politically,” he said. “They’re putting Gavin Newsom in a bind. Greg Abbott.”
