By Therese Poletti
Elon Musk's reasons for moving SpaceX and SpaceX's headquarters to Texas go far beyond a new California law protecting the rights of gay and transgender children.
Musk, who in a post on X on Tuesday called the state's new law banning schools from outing gay and transgender children to their parents “the last straw,” has been increasingly negative about California in recent years.
“Because of this law and many other laws before it that attacked both families and businesses, SpaceX will now be moving its headquarters from Hawthorne, California to Starbase, Texas,” he said in his tweet. He later added, “And X HQ will be moving to Austin.”
SpaceX already has a launch facility, control center and rocket production facility near Brownsville, Texas, on the Gulf of Mexico. SpaceX calls the site Starbase and has expanded it in recent years. The company's headquarters are currently in Hawthorne, California, outside Los Angeles. It's not clear how many employees will move or if it will just be a small office staff to support top managers and the board.
The plan to relocate San Francisco-based Company X is not the least bit surprising, as Musk has been complaining about the city and the neighborhood where X is based since he bought the social media company formerly known as Twitter for $44 billion in 2022. He has tweeted that he is tired of “avoiding gangs and violent drug addicts just to get into the building,” and last week the San Francisco Chronicle reported that X is looking to sublease the entire building that currently houses its headquarters.
It is unclear how many employees X currently employs and whether a relocation to Texas will be necessary.
Musk has already moved Tesla Inc.'s (TSLA) headquarters from California to Austin, Texas, and in June won shareholder approval to reincorporate the company in Texas after a Delaware judge voided his $56 billion pay package earlier this year. Tesla shareholders also approved his pay package a second time. Musk expects that a newly formed Texas business court, which aims to compete with the Delaware Chancery Court in commercial disputes, will be favorable to him and his companies.
Also read: Shareholders should reconsider Elon Musk's plans to re-establish his company in Texas.
It is clear that Musk has many business reasons for these moves. He considers California too expensive, too litigious and too friendly to workers and their rights. He wants lower taxes and lower labor costs.
He is using the latest political news about the rights of parents and their children to smooth things over, just after reports surfaced that he would donate $45 million a month to a new super PAC supporting convicted felon Donald Trump for president.
“It definitely has some political overtones, regardless of the economic benefits,” Eric Talley, co-director of Columbia Law School's Millstein Center for Global Markets and Corporate Owners, said Tuesday. Talley also said Musk's companies will likely still leave a large economic footprint in California. “One reason it's so hard for companies to leave California is because there's a large network of tech workers there… That's hard to start from scratch.”
California Democratic Governor Gavin Newsom fired back at Musk on Tuesday, tweeting that he had “fallen to his knees” before Trump.
But Musk's followers and fans have only used the opportunity to denounce the current state of California, the homeless problem and what they see as lax laws.
Musk has become increasingly conservative in recent years. And remember, he exaggerates about almost everything – like Tesla's robotaxi capabilities. The reasons for his move to Texas are no different. When it comes to Musk, exaggeration is always the order of the day.
-Therese Poletti
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16.07.24 2126 ET
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