Speak EV - Electric Car Forums banner

1 - 20 of 33 Posts

·
Registered
Joined
·
1,451 Posts
Discussion Starter #1

·
Registered
Joined
·
3,987 Posts
A very immature and petulant reaction. Such people just want a race to the bottom on working practices and employee safety. I can understand the frustration at the economic cost of lockdown, but this is time to sue the state rather than threaten it.
 

·
Moderator
Joined
·
1,534 Posts
It's a negotiation tactic.

Frankly, with GF Nevada, GF New York, GF Shanghai, GF Berlin.... He's already started moving a lot of the business out of California. It's good to reduce the reliance on one location.

I think today's whole move was to pressure Alameda County to move faster in re-opening the Fremont Factory.

Any move out of California will take a while... And knowing Tesla time... It will take even longer.
 

·
Registered
Joined
·
327 Posts
Elon’s tweets of late start to sound.....a bit unhinged. Not sure where this will end!
 

·
Moderator
Joined
·
1,534 Posts

·
Registered
Joined
·
806 Posts
Elon’s tweets of late start to sound.....a bit unhinged. Not sure where this will end!
Actually I have been thinking about this and I have to disagree.

In fact, I'm pretty sure now that whilst this tweet vocalises the idea, Tesla moving out of California was pretty much inevitable. Not immediately, and it won't happen immediately anyway, but let's have a look at it.

Tesla needed California to begin with - not only is a forward-thinking, technologically advanced place with severe air quality problems a natural home for EVs, but Tesla needed the Silicon Valley culture of fast innovation. Note that Elon's tweet specifically cited Tesla HQ (which is in Palo Alto, not Fremont), and Tesla HQ is a technology development and design centre. That HAD to be in silicon valley in order to have access to the pool of talent required as well as the right investors. However, now that Tesla is maturing and that people want to work for Tesla globally, people will go to Tesla wherever Tesla is. Many people and many high-tech businesses have already been moving out of silicon valley, especially to Texas - Silicon Prairie (there's also a Silicon Forest - Beaverton/Hillsboro OR). Dallas is the centre for much high-tech industry, and for a more mature company offers many benefits over silicon valley - for example, 40something engineers don't have to pay most of their paycheck to rent a room in a shared house in Dallas, unlike silicon valley where a modest 1200sq ft house comes with a seven figure price tag. Many of those working at Tesla HQ would welcome the quality of life improvement that would come of Tesla moving to Texas. The best and brightest will still flock to work at Tesla.

Now let's talk about Fremont... Fremont happened with fortuitous timing for Tesla. They paid a small sum for the Fremont plant, and it has served them well. However, GF3 is already demonstrating the limitations that Fremont is imposing upon Tesla - the factory is not purpose built for the way that Tesla builds cars. Once GF4 is built and Tesla build a new cybertruck plant in the midwest, then what? Well, personally I think that a GF5 in Australia (probably Perth) would make a huge amount of sense (dedicate GF5 to RHD production - Australia is ideally placed to serve the vast majority of global RHD markets - Southern Africa, India, Asia-Pacific (eg Thailand, Malaysia, Indonesia, Hong Kong, Japan) as well as Australia and New Zealand. Having a dedicated RHD GF solves the problems that RHD production is causing at Fremont), but once that's there then Fremont will look exactly what it is - old, creaky and not well optimised compared to purpose built GFs. If Nevada or Texas or Missouri or wherever comes up with good tax breaks etc to build a new GF then Tesla would be well served by following that path, rather than persisting with Fremont - not to mention the cost of living in Fremont (as bay area, immediately adjacent to silicon valley) is astronomically high compared to some of the likely GF locations (eg Joplin MO). Again, many Tesla workers, if given the opportunity to move with the factory, might welcome the quality of life improvements that come with not being in the bay area.

And how about earthquakes? Major earthquakes occurring in the Bay Area is inevitable. They WILL happen. It's not a matter of if there's another big one, it's a matter of when. The Fremont plant is almost on top of the Hayward Fault - at that point in the Bay it is pretty much running underneath I-680, which is literally half a mile from the factory's back fence. In other words, there's a material risk that a major earthquake could occur that, assuming the best case with regard to people's lives, could cause major disruption to the operation of the Fremont plant. Earthquakes aren't a lottery, where the odds don't change regardless of how long you play for - the longer they don't occur the more likely they are to occur with more devastating results.

It isn't uncommon for american corporations to move headquarters with a degree of regularity. The way that taxes are levied in the USA means that often even at county level huge tax breaks will be offered to a corporation that moves their HQ there. They move, enjoy the tax breaks and then when the tax breaks expire (often 5-10 years) then they shop around for the next place that will offer them huge tax breaks to move their HQ there. For example, NCR corporation moved from Dayton OH to Duluth GA in 2009 because Gwinnett County offered them huge breaks. In 2018 they moved from Duluth to Atlanta GA - Atlanta offered them tax breaks and the opportunity to build a huge building near Georgia Tech university. In 10 years time when they move on from there they'll make a fortune on the real estate deal, and shop for the next set of tax breaks.

So, ultimately I don't think that Tesla was by any means bound to stay in California, regardless of COVID. Maybe this situation has shone a light on it or maybe Elon is just using it as method to pressure the county, but I don't think that this is just spur of the moment.
 

·
Registered
Joined
·
327 Posts
Actually I have been thinking about this and I have to disagree.

In fact, I'm pretty sure now that whilst this tweet vocalises the idea, Tesla moving out of California was pretty much inevitable. Not immediately, and it won't happen immediately anyway, but let's have a look at it.

Tesla needed California to begin with - not only is a forward-thinking, technologically advanced place with severe air quality problems a natural home for EVs, but Tesla needed the Silicon Valley culture of fast innovation. Note that Elon's tweet specifically cited Tesla HQ (which is in Palo Alto, not Fremont), and Tesla HQ is a technology development and design centre. That HAD to be in silicon valley in order to have access to the pool of talent required as well as the right investors. However, now that Tesla is maturing and that people want to work for Tesla globally, people will go to Tesla wherever Tesla is. Many people and many high-tech businesses have already been moving out of silicon valley, especially to Texas - Silicon Prairie (there's also a Silicon Forest - Beaverton/Hillsboro OR). Dallas is the centre for much high-tech industry, and for a more mature company offers many benefits over silicon valley - for example, 40something engineers don't have to pay most of their paycheck to rent a room in a shared house in Dallas, unlike silicon valley where a modest 1200sq ft house comes with a seven figure price tag. Many of those working at Tesla HQ would welcome the quality of life improvement that would come of Tesla moving to Texas. The best and brightest will still flock to work at Tesla.

Now let's talk about Fremont... Fremont happened with fortuitous timing for Tesla. They paid a small sum for the Fremont plant, and it has served them well. However, GF3 is already demonstrating the limitations that Fremont is imposing upon Tesla - the factory is not purpose built for the way that Tesla builds cars. Once GF4 is built and Tesla build a new cybertruck plant in the midwest, then what? Well, personally I think that a GF5 in Australia (probably Perth) would make a huge amount of sense (dedicate GF5 to RHD production - Australia is ideally placed to serve the vast majority of global RHD markets - Southern Africa, India, Asia-Pacific (eg Thailand, Malaysia, Indonesia, Hong Kong, Japan) as well as Australia and New Zealand. Having a dedicated RHD GF solves the problems that RHD production is causing at Fremont), but once that's there then Fremont will look exactly what it is - old, creaky and not well optimised compared to purpose built GFs. If Nevada or Texas or Missouri or wherever comes up with good tax breaks etc to build a new GF then Tesla would be well served by following that path, rather than persisting with Fremont - not to mention the cost of living in Fremont (as bay area, immediately adjacent to silicon valley) is astronomically high compared to some of the likely GF locations (eg Joplin MO). Again, many Tesla workers, if given the opportunity to move with the factory, might welcome the quality of life improvements that come with not being in the bay area.

And how about earthquakes? Major earthquakes occurring in the Bay Area is inevitable. They WILL happen. It's not a matter of if there's another big one, it's a matter of when. The Fremont plant is almost on top of the Hayward Fault - at that point in the Bay it is pretty much running underneath I-680, which is literally half a mile from the factory's back fence. In other words, there's a material risk that a major earthquake could occur that, assuming the best case with regard to people's lives, could cause major disruption to the operation of the Fremont plant. Earthquakes aren't a lottery, where the odds don't change regardless of how long you play for - the longer they don't occur the more likely they are to occur with more devastating results.

It isn't uncommon for american corporations to move headquarters with a degree of regularity. The way that taxes are levied in the USA means that often even at county level huge tax breaks will be offered to a corporation that moves their HQ there. They move, enjoy the tax breaks and then when the tax breaks expire (often 5-10 years) then they shop around for the next place that will offer them huge tax breaks to move their HQ there. For example, NCR corporation moved from Dayton OH to Duluth GA in 2009 because Gwinnett County offered them huge breaks. In 2018 they moved from Duluth to Atlanta GA - Atlanta offered them tax breaks and the opportunity to build a huge building near Georgia Tech university. In 10 years time when they move on from there they'll make a fortune on the real estate deal, and shop for the next set of tax breaks.

So, ultimately I don't think that Tesla was by any means bound to stay in California, regardless of COVID. Maybe this situation has shone a light on it or maybe Elon is just using it as method to pressure the county, but I don't think that this is just spur of the moment.
I don’t disagree with your arguments on the Tesla move....but have you read his recent tweets?

Examples in this article.

As an utterly irrelevant aside, I did enjoy 3 weeks working on some bleeding edge engineering code (as a field engineer!) at NCR in Dayton over 20 years back.....good times!!
 

·
Registered
Joined
·
179 Posts
It's not good for the US the way local states have to bid against each other to get companies to move there. They should just agree a standard set of tax rules with the federal government, and the states should agree not to give ad-hoc tax breaks.

The way states fight against each other benefits big corporations and their rich owners, and is a part of the reason the US is a case of neoliberal capitalism gone to excess.

The atlantic covered this issue in a related article.

 

·
Registered
Joined
·
1,904 Posts
My quick scan of Google suggests Texas is rather more friendly towards the employer than the employee...

No wonder Musk is keen on a move.
 

·
Moderator
Joined
·
1,534 Posts
It's not good for the US the way local states have to bid against each other to get companies to move there. They should just agree a standard set of tax rules with the federal government, and the states should agree not to give ad-hoc tax breaks.

The way states fight against each other benefits big corporations and their rich owners, and is a part of the reason the US is a case of neoliberal capitalism gone to excess.

The atlantic covered this issue in a related article.

This has been the way it has been my entire business life. As one of the few Californians on SpeakEV, you learn to deal with it. There is an environment in California that is appealing to many, EVEN with the progressive nature of the way we tend to be expected to treat each other.

It's amazing how much Silicon Valley (the Entertainment Industry, (used to be the Defense Industry before the end of Cold War)) and others are able to get concessions to ensure the growth that we have experienced over the decades of industrialization...
 

·
Chartered Engineer
Joined
·
1,859 Posts
My initial thoughts on this were that Elon Musk was in the wrong, but on reflection I think I actually agree with him!

Without a vaccine, the aim of lockdown is to slow the rate of infection so the health services can cope. Without a working economy people will loose their livelihoods and if it gets bad enough the state will be unable to fund anything so there has to be a balance between slowing the rate of infection of the virus and keeping the economy running. At the present time the infection rate has dropped enough that some business are being allowed to restart with sensible precautions. Given Tesla arguably has more idea of what's required to run safely based on direct experience this does seem very odd, also a production line by it's very nature has very predictable people movements and a highly automated vehicle line minimises the density of personnel, so therefore in theory should be a lot easier to spot dangerous areas and modify.

Despite this Lorena Gonsalez rejected Tesla's proposal to restart, tweeting that the Silicon Valley Tech giants have been allowed to bypass laws and she wouldn't be bullied - at the same time allowing all of these to restart apart from Tesla. There was also in internal email telling staff to slow down responses to Tesla suggesting it was being singled out. There has been some speculation that the fact she has been supported by Chevron had something to do with this, but her main sponsors are the unions so I suspect it's more to do with the fact that Tesla is not unionised. It can be argued whether that's good or bad, and Tesla have certainly not aided unionisation but if the workers so decided then there's not a lot they could do. There's also claims that Tesla conceals it's accident rates and that they're much higher than the industry average, but even here it's difficult to find a valid comparison given Tesla's level of vertical integration - it's certainly not a valid comparison to use a Ford or GM plant. Her tweet saying "F*uck Elon Musk" would seem to confirm this is a personal vendetta rather than reasoned action.

California is often stated as being anti-business and certainly hundreds of business have moved operations in recent times, so there is precedent for Tesla. An often cited additional reason is the cost of living is so high that employees are happy to move. Moving the HQ would be relatively easy. Freemont would be more difficult, but the plant layout is poor, so there is some logic in setting up elsewhere with a clean sheet of paper based off the Shanghai model. There is a cost, but long term it could be a very sensible move so I think the Alameda county administration needs to tread carefully unless they really do want to lose Tesla.
 
1 - 20 of 33 Posts
Top