The Tesla plant’s illegal start-up has not only created a conundrum for the California government, but also a negative example for other businesses. On the other hand, the Texas government is excited about Musk’s intention to move, and even offered to attract investment. California and Texas, two long-suffering states, have one more battleground.
Sina Technology Zheng Jun from Silicon Valley, USA
Public violations to challenge the government
Tesla’s turmoil isn’t complicated: The state government did agree on Friday that companies have conditions to resume work, but it must be stressed that the start was subject to a safety and epidemic audit by the county health department and whether the approval authority for the resumption of work would be granted to the county government. The Alameda County Department of Health did not approve the immediate resumption of production at the Tesla plant because it did not meet the standards for safe start-ups and explicitly requested the plant to make adjustments. The health department official who made the decision was an infectious disease doctor who had been in the industry for more than two decades.
However, Musk was reluctant to delay the company’s performance, so he forced the start of the operation, while suing the Alameda County government, saying that “Tesla headquarters and future projects immediately moved to Texas/Nevada.” When the Bay Area originally issued the home order, the Tesla plant, which was not a “people’s livelihood essential,” was delayed by a week after the county government warned it to close on March 23.
Tesla’s blatantly high-profile re-entry, Musk’s public claim to “grab me and catch me” has embarrassed the California government. The punishment of Tesla could force the nation’s largest auto maker, affect California’s green economy and business climate, and threaten more than 10,000 jobs tesla sits in California. But not punishing Tesla is a tacit ineffectual government authority against corporate giants, and will affect the enforcement of anti-epidemic regulations in other regions and other businesses in the future, and the worst-hit Los Angeles area has extended the home order until July.
As things stand, there is no mention of punishing Tesla, from california’s governor to the county government to the city government, but rather to emphasize that Tesla wants to communicate more with the county government in the hope that the county government will give Tesla the green light. California Gov. Mike Newsom even proposed a compromise that would delay Tesla’s re-entry until next week, leaving room for both the county health department and Tesla. But it is not yet known whether the Alameda County government and Musk will take the step and address the current wave of anti-life recovery.
California officials don’t give up on the giants.
The Fremont, Bay Area, plant is Tesla’s only assembly plant in North America. It was first built by GM in 1916 at the Chevrolet Assembly Plant, a joint venture between Toyota and GM between 1984 and 2010. Tesla, which acquired the plant in 2010, now has five assembly lines, has an annual capacity of more than 300,000 vehicles and plans to increase it to 500,000. Tesla also has solar cell plants in New York and automotive plants in Nevada.
The Tesla plant is also the only auto assembly plant in California. Musk spits that “all the other auto plants are up and where Tesla can’t get back to work” because other automakers aren’t in California, and other states don’t enforce epidemic controls as strictly as the California government. Major automakers have moved factories out of the state over the past few decades because of the state’s strict labor and environmental regulations, as well as high land and labor costs. Wanxiang’s Karma electric car has a car assembly plant in Southern California, but is mainly small-scale customization, with an annual production of only a few thousand vehicles.
The California government certainly doesn’t want to see Tesla leave. California’s government focuses on the green economy and new energy, Tesla is undoubtedly the industry’s star enterprises, but also the United States of America’s representative company of scientific and technological innovation. And California’s economy is facing difficulties. California’s government expects revenue for the fiscal year to be $41.2 billion, or 25 percent, lower than it expected four months ago, as the economy shuts down because of the outbreak, while the state’s budget surplus, which was expected to run by billions of dollars, has risen sharply, while the state’s billions of dollars is expected to run a budget deficit next year.
Unemployment is a big problem for the California government. California has added nearly 4.5 million new jobs since mid-March because of tight economic regulations, and the unemployment rate is expected to eventually reach 25 percent. Tesla employs 10,000 people at its Fremont plant alone, which also creates thousands of indirect jobs. And if Tesla does move out because of strained government relations, it could trigger more companies to leave the state, a result the state is reluctant to face.
Texas officials scramble for a good job
After Musk publicly announced that he would move Tesla’s headquarters and future projects to Texas, local officials in Texas rushed to give Musk a twitter bid. ‘Dallas is the fastest growing metropolitan area in the United States and the champion of job creation,’ Justice Clay Jenkins of Dallas County, Texas, told Musk in public. He even posted photos to prove that he was a Tesla owner and a big fan. Dallas is the first city in Texas to recover from the outbreak, and South Dallas would be Tesla’s best address, said Eric Johnson, the mayor of Dallas. He also took on Texas Gov. Greg Abbott. The latter retweeted a concerned expression.
Texas Senator Ted Cruz said of Musk, “Welcome Tesla to Texas, we love to work, and Texans really want to get started (and respect science). Texas makes a lot of cars and trucks, and we want to make more! Judge Richard Cortez of Hildalgo County, Texas, near the U.S.-Mexico border, even wrote to Musk, stressing that the region is close to SpaceX’s rocket launch site in Texas, as well as the large labor force in the automotive industry, which can quickly train to work at the Tesla plant. In particular, Cortez noted that the Texas government is business-friendly and that home-stay ingresss sanomore.
Texas has no state tax component for personal income tax, and living costs and pay levels are much lower than california;Texas’ corporate income tax and land costs are lower than California’s. If Tesla moves to Texas, it will not only save on its own taxes, but also significantly reduce fixed expenses and labor costs. Joe Vranich, a corporate relocation expert, said last year that 13,000 businesses had left California in the past eight years, saving 30 percent of operating costs by moving from California to Texas.
Meanwhile, a large number of Californians are moving to Texas to avoid high taxes and high prices, with 86,000 Californians flocking to the state in 2018 alone, up 36 percent from a year earlier. But interestingly, Californians came to Texas to avoid taxes, but they continued to support the local Democratic Party because of liberal values, pushing up the Texas Democratic party’s voter base and turning Texas from deep red to light red. The Texas Democratic Party even came up with the slogan “Make Texas Blue” after getting a large number of new voters.
The two lighthouses have been fighting for a long time.
In fact, California and Texas have long been in a fight, looking at each other. Not only are the two states in the top two states with 48 u.S. mainlanders and the top two populations (populations 40 million and 30 million, respectively), but the economy is also the top two in the U.S. ($3.14 trillion and $189 million in 2019 GDP, respectively). In terms of economic policy and values, California and Texas are the two core camps of Democrats and Republicans, holding up the banner of liberalism and conservatism. Earlier this year, Texas even banned its own public servants from traveling to Texas for “discrimination against LGBT people in Texas,” and Texas chose to sue the state in the Supreme Court.
California and Texas have a very different attitude when it comes to the outbreak and the resumption of work. California was the first state in the country to enforce regulations, and Texas was the first state in the country to deregulate. In fact, the outbreak in both states is very serious. The number of confirmed cases in Texas has increased from 26,000 to 41,000 in the past half-month, an average of 1,000 a day. Over the same period, California’s number of confirmed cases increased from 43,000 to 69,000, an increase of 26,000, an average of 1,500 a day. But Texans, by contrast, seem to see the economy as more important, announcing deregulation half a month ago, and the texas lieutenant governor has even put forward a slogan that the elderly could be sacrificed for the economy.
Texas has its own pool of science and technology talent, the capital Austin has a so-called “Silicon Mountain” technology park, Intel, AMD, Dell and other tech giants have set up a park here, many engineers voluntarily moved here from within Silicon Valley, because no income tax, housing costs are also significantly reduced, the quality of life can be significantly improved. Texas also has its own auto industry base, where Both General Motors and Toyota have assembly plants. Texas has a large and low-cost workforce compared to California, and government regulatory policies are clearly good for business.
Whether Tesla really wants to leave California, however, remains uncertain. California has not only the largest pool of tech talent in the United States and the world, especially the self-driving talent Tesla needs for future research and development, but also Tesla’s largest market in the United States. Texas is the most important oil producer in the United States, the demand for new energy is not so strong, Tesla’s main new energy concept in Texas may not be as enthusiastic as California. In addition, if Tesla’s headquarters is to move to Texas, a new plant will need to be built in Texas to meet the need for close collaboration in Tesla’s high-tech car development and manufacturing. Under Tesla’s current funding situation, building an additional assembly plant in the United States is a billion-dollar investment.
Musk is both an innovative entrepreneur and a marketing guru. He is very good at using Tesla and his star reputation to win the best government policy and business environment for businesses. In 2014, Tesla eventually built its own battery plant in Nevada after considering several sites in California, New Mexico and Texas, largely because of a $1.25 billion tax break.