Will SpaceX’s Move Impact Los Angeles?
- by Los Angeles Business Journal
- Jul 29, 2024
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SpaceX headquarters in Hawthorne. (Photo by David Sprague)
When Elon Musk announced plans to move the headquarters of Space Exploration Technologies Corp. to Texas earlier this month, it set off speculation as to what exactly it meant.
It was not immediately clear if the company, better known as SpaceX, would move its manufacturing operations from Hawthorne to Texas, as an example. Attempts to reach a representative of SpaceX, founded by Musk in 2002, were unsuccessful.
Christopher Thornberg â an economist and the founding partner of Beacon Economics LLC, an independent research and consulting firm in the Fairfax District of Los Angeles â said that Musk was unlikely to move the entire company to Texas.
Chris Thornberg of Beacon Economics
âYou donât pick up an enormous, complex operation like SpaceX and move it from one state to another, not without losing half your workforce, which SpaceX can hardly afford to do,â Thornberg said.
SpaceX has a pretty unique workforce of rocket scientists, âwho donât exactly grow on trees,â he added.
âThey are not everywhere, and you need to hire them where they live and they start to live where they are hired,â Thornberg added.
Headquarters move all the time, he said, adding that it would only impact 200 or 300 employees, a small percentage of the 13,000 employees SpaceX has overall.
âWould he go as far as to move his production facilities to Texas?â Thornberg asked. âNot a chance.â
It is his belief that Musk made the announcement to generate media attention.
âHeâs constantly throwing grenades out there,â Thornberg said. âThat seems to be his joy in life.â
Musk is also moving the headquarters of his social media platform X â formerly called Twitter â to Austin, Texas, from San Francisco.
In a posting on X, Musk said the move was happening because of Gov. Gavin Newsom signing a law that will bar schools from requiring teachers to inform parents of gender identity changes by their students.
Thornberg said another factor could be that Musk is a supporter of former President Donald Trump and has made contributions to his presidential campaign.
âAnd when you are looking at the Republican campaign what is one of their primary cautionary tales? It is California,â Thornberg said.
âRightly or wrongly, they are constantly throwing darts at California as a cautionary tale of what will happen if, God forbid, the Democrats win the election,â he added. âThat is part of that game.â
The new location of SpaceXâs headquarters will be Starbase, a development and launch site for the companyâs Starship rocket, a two-stage fully reusable super heavy-lift launch vehicle.
Work on Starbase started in 2014 and continues today. In May, construction began on a second launch site.
In addition to the launch sites, SpaceX also builds the rocket in Texas. That contrasts with the Falcon 9 rocket, which is built in Hawthorne.
Property: SpaceXâs launch facility in Texas.
âDeath by a thousand cutsâ
Tom Lasser, president of the South Bay Aerospace Alliance, a support group for the U.S. Air Force and Space Force and an advocate for the aerospace industry, said that it sounds like it will be the headquarters that will move initially.
âI donât know how big that is,â Lasser said of the number of employees who may relocate. âBut itâs high paying jobs leaving California.â
Itâs not the first major aerospace company to relocate outside of Southern California.
Northrop Grumman Corp. moved its headquarters from Century City to Virginia in 2011 to be closer to its government customers. And Aerospace Corp. announced this spring that the company headquarters would move to Chantilly, Virginia.
âTo hear this about a local 7,000-employee operation being affected just reminds me about the old Chinese fable of a death by a thousand cuts,â Lasser said. âA little bit here and little bit there and you turn around and thereâs no one there.â
It shows a lack of concern on the part of the state, he continued. He believes that businesses are being driven out of California due to certain policies, procedures, requirements, laws and taxes.
âThis is a sad example of the indifference and complacency of some people about this vital industry and the jobs and the payroll that is leaving the state,â Lasser said.
While the South Bay remains home to the nationâs aerospace industry, he said itâs not the same as it used to be.
âItâs getting smaller instead of bigger,â Lasser said. âThere are a lot of startups coming but the legacy companies keep taking hits and being plundered by other states that are giving them better deals. I donât think we as a state are taking it seriously to protect our industry.â
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