California state panel reject subsidies for Elon Musk's SpaceX over Tesla spat

A California state panel on Friday rejected a request from Elon Musk`s SpaceX for $655,500 in state job and training funds, citing the chief executive`s recent threats to move Tesla, the electric carmaker that he also runs, out of the state.

The snub comes as Musk has sparred with officials in Alameda County over his plans to resume production at the Tesla plant there, which was stopped because of the coronavirus. Photo: Reuters

A California state panel on Friday rejected a request from Elon Musk`s SpaceX for $655,500 in state job and training funds, citing the chief executive`s recent threats to move Tesla, the electric carmaker that he also runs, out of the state. The snub comes as Musk has sparred with officials in Alameda County over his plans to resume production at the Tesla plant there, which was stopped because of the coronavirus.

Five members of California`s Employment Training Panel voted to reject the proposal and two voted for it, with one member absent, after discussing Musk`s tweets on Tesla`s reopening and media reports of layoffs at SpaceX`s Hawthorne, California headquarters in recent years.

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"In my opinion, given the recent threats of the CEO to leave the state of California, and everything else we’ve discussed today, this proposal does not rise to the level for me to feel secure in supporting it," said Gretchen Newsom, a panel member and the political director of an IBEW electrical workers union local.

"SpaceX is a different company, but they have the same CEO," said Newsom, who is not related to California Governor Gavin Newsom.

Though a small amount of money, the funding was opposed by organized labor groups. Tesla and SpaceX are both nonunion shops.

The funding from the state employment development fund was supposed to help SpaceX train 900 employees for its Starlink satellite project and hire 300 to work on its Starship program. It was unclear whether SpaceX intends to move forward with its hiring plan after Friday`s rejection. SpaceX did not immediately respond to a request for comment.

Since the disagreement between Tesla and Alameda County gained national attention, officials from such states as Texas, Nevada, Georgia, Utah and Oklahoma have pitched Musk about considering their state for existing operations or for a new factory the company has promised.

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