Elon Musk announced this week that he would move the headquarters of his companies X and SpaceX from California to Texas, the culmination of a long-running face-off between the volatile executive and the state where his companies were founded.
A year ago, Musk announced that he would not move the X headquarters from San Francisco – Although His claims that the city was in a “spin of doom”. At the time, he wrote, “You only know who your real friends are when the chips are down. San Francisco, beautiful San Francisco, even if others forsake you, we’ll always be your friend.
But now, Musk has changed his tune, citing a new California law banning school transgender notification requirements as the reason for his exit in a series of angry tweets on Tuesday. “California’s governor has signed a bill that massively erodes parental rights and puts children at risk for permanent harm,” he wrote. to say The bill “hits both families and companies”. “Many will follow,” he replied to another tweet about leaving California He shared What appeared to be an overly photoshopped or AI-generated image of himself in a cowboy hat captioned “Texas.”
Although the executive has long complained about doing business in California, says With the Golden State a land of “taxes, overregulation and lawsuits” in 2022, experts say the timing of the announcement represents more than an economic choice. It comes just days after Musk threw his full support behind Trump, saying he would donate $45 million a month to a super fund supporting the former president.
“He’s making a political calculation,” said Sarah Krebs, a policy analyst and professor of government at Cornell University. “If he takes this decision at another time, it will be a different story. This is part of a larger message he is trying to send about politics and his politics.
Musk’s tumultuous relationship with California has been storied. He founded SpaceX in 2002 in Hawthorne, Los Angeles. 2009, according to figures from Governor Gavin Newsom’s office.
However symbolic, the move is likely to reignite the perennial debate about San Francisco’s “doom loop” — the City by the Bay’s inexorable decline. With its 800,000 square foot headquarters located on Market Street in downtown San Francisco, X is one of the last remaining companies with substantial facilities in the area. As of 2019, there are 20 largest technology companies was cut That was half the amount of office space rented in downtown San Francisco. Earlier this month, Twitter began looking for sublessees for its offices.
Downtown San Francisco has been trying to reverse urban blight for nearly 15 years. X, formerly Twitter, previously benefited from a tax break enacted in 2011 to attract companies to San Francisco’s mid-market area, which has long struggled economically. The law was sunsetted in 2019, and the exit of X headquarters could be another blow to the region. 46% offices And 40% retail spaces are empty. Other companies They left that Or Meta, Salesforce, Snap, Lyft, Block, Airbnb, and PayPal all downsized their offices in San Francisco starting in 2021.
Many employees and customers of companies owned by Musk will inevitably remain in California, and experts say the moves will be more symbolic than practical. Musk previously relocated the headquarters of his electric car company Tesla from California to Texas in response to the Golden State’s coronavirus measures, which he called “fascist” as he clashed with regulators over keeping his facilities open despite the pandemic. Today, however, several Tesla factories are located in California, including one of its largest production sites – the Gigafactory in Fremont, California.
“As long as these companies still have an economic presence in California, the state will still have influence over them,” said Eric Daly, a corporate law professor at Columbia Law School. “If you want to completely stamp yourself out of the state, you’ll have to not only move your headquarters, but also stop selling and manufacturing in California — and I doubt that’s going to happen.”
How exactly the changes will unfold at SpaceX and X is more difficult than at other tech companies, as Musk has been adamant about employees returning to work in person. After receiving X in 2022, Musk ordered all of his employees to return to the office full-time, demanding that they be “very tough.” SpaceX also has an office order for employees.
Musk’s announcement and Newsom’s targeting of X sparked a back-and-forth between the executive and the California governor, who tweeted, “You bent the knee” — implying Musk pledged his loyalty to Trump. Musk then replied “You don’t get off your knees”.
Even if Musk had a political transition, it would be difficult to move X and most of SpaceX’s employees from California, a relatively liberal, tech-focused haven, to a red state like Texas, experts say. Moving a company’s headquarters is easy, Daly said. Moving its employees? Less.
“It takes a lot to elevate a sweet spot with great network advantages — to move people who have planted roots in the area and, frankly, may be at odds with Texas politically,” he said. “They don’t want to trade Gavin Newsom for Greg Abbott.”
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