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Tesla in Texas: Fable, Facts and Fiction – Or How Does It Feel to be Rejected by Elon Musk?

(RNR) – By Ralph Bivins — 

THE FABLE: Once, there was a Texas boy, who became a young man, who admired a young woman.

The highlight of his day, and the precious word that always moved his heart, was the moment she said “here” in the homeroom roll call.

In the school halls, a pack of girls surrounded her like tiny offensive linemen blocking anyone who wanted to approach. He thought about her all summer. How could he get close enough to talk to her?”

The next year there was a rare opportunity. She was sitting alone in the cafeteria during lunch. He sat down and she immediately got up. Without making eye contact – she said his name for the first time.

“Sam, would you take care of my tray?”

He watched her walk away and his heart pumped hard as he toted her dirty dishes to the dishwasher.

The next week he called her. She talked about her plans to buy new clothes. Then she declined to go to the movies with him. Over the next six months, he asked her six times and she always turned him down. She dated other guys instead.

They both ended up the University of Texas in Austin, the groovy city where cool people live. He saw her in freshman English class. Over the next year, she declined several invitations. He shaved off his moustache. He bought new clothes. Nothing changed.

Finally, as they walked across a huge campus plaza, he spoke to her earnestly, without any anger.

“Why do you go out with other guys and never with me? What’s wrong with me? Just be honest and tell me,” he begged. “What’s wrong with me?”

“We’re just not a good match, Sam.”


THE  FACTS:  In January, President Trump tells CNBC news that Elon Musk is planning to build a huge Tesla auto factory in the United States.

On March 10, the details start dribbling out on Elon Musk’s Twitter account. Musk has dispatched scouts to search for a factory site. The plant will produce the new Cybertruck pickup and a compact sports utility vehicle called the Model Y. These are EVs – electric vehicles that plug into charging stations – no gasoline required.

Musk tweets that a factory site in the middle of the United States– pickup truck country – is preferred.  Such a location allows Tesla to ship vehicles to the East Coast, he says.

The Tesla factory is a rich deal in the economic development world. Everybody knows Tesla will demand and receive major-league tax breaks.

The Wall Street Journal scores a rare quote from Musk himself: “Incentives play a role, but so do logistics costs, access to a large workforce with wide range of talents, and quality of life.”

During the Spring of Covid panic, Houston sits on the sidelines, while other communities lust after the Tesla plant and implement strategies. Rumors circulate that Tesla will hire 10,000 employees. The new electric car factory may span more than 4 million square feet.

Houston officials do not expect to receive an RFP    (Request for Proposal) from Tesla. Houston fails to meet federal Clean Air Act’s air quality attainment goals on ozone specs, making it more difficult to get approval to build a car factory. Houston leaders believe their city has been disqualified from getting car factories in the past, and with Tesla, disqualification surely would happen again. With a defeatist attitude, Houston officials believe Houston must be satisfied gorging on a nasty buffet of billion-dollar chemical plant expansions instead.

It is not known if any Houston official asks for an exception to be made on the Clean Air Act restrictions, which sounds reasonable since Tesla’s most recent Gigafactory in Reno is powered by solar panels and runs “net-zero” by making as much electricity as it uses.

As national lockdowns from the coronavirus persist, the Tesla plant near Oakland, Calif. remains closed due to governmental mandate. Tesla amasses a production backlog.

On May 9, Musk tweets that he is suing California officials because of the Tesla plant shutdown. Musk is angry.

Later that day, Musk ups the ante. “Tesla will now move its HQ and future programs to Texas/Nevada immediately,” Musk tweeted.

Even the possibility of a headquarters location is enough to set off a frenzy. On May 15, Houston Mayor Sylvester Turner sends a letter to Musk, suggesting that Tesla should move to Houston.

Another major event on May 15: Detroit-based Associated Press auto writer Tom Krisher reports that Austin and Tulsa are finalists for the new auto factory.

No evidence exists that an RFP was ever distributed by Tesla. The Austin/Tulsa selection seemed to be made in the brain of Tesla’s CEO Elon Musk, who is also busy planning to launch one of his SpaceX rockets with a crew of NASA Astronauts.

The competition begins, Tulsa vs Austin. On the surface, people see the competition as politician-breathed hype and publicity stunts. Behind the scenes, plans and proposals advance about tax incentives and the benefits that will come with the Tesla deal.

On May 17, the Tulsa mayor vows that the city’s police force will drive Tesla Cybertrucks, if things work out right.

Tulsa’s marketing desperation reaches to public statuary. Tulsa’s 75-foot Golden Driller statue – a tribute to the oil industry depicting hard-hatted oilfield worker – is repainted and branded with the Tesla logo. Paint over the Driller. Diminish his industry, which watched oil drop below $0 a barrel exactly one month before the statue’s paint-over job. The Driller is the past. Electric cars are the future. Tulsa officials say the face of the Driller statue now looks like the face of Elon Musk.

Tulsa’s groveling does not work.

On July 22, Musk announces Austin won. The $1.1 billion plant, to be located on the east side of Austin will employ 5,000 with average pay of $47,147. Some 65 percent of the employees will be blue-collar types with no college degree.

The 4.5 million-SF factory will be built near the Colorado River in southeastern Travis County.

Tesla’s incentive package is sizeable. It’s about $61 million in tax breaks from the Del Valle school district and Travis County.

Tesla closes on the land deal, paying $97 million for 2,100 acres. The seller is Martin Marietta, a North Carolina cement maker, had used the property for years to mine gravel.

Musk says the factory will be a park-like “ecological paradise” with fish in its streams and hikers on its pathways. No mention of the site’s uninspiring gravel pits, which were almost depleted of rock anyway.

THE FLAW

Tesla’s Austin Gigafactory will be huge. With almost 5 million square feet of space, the place with be a beehive of activity.

With 5,000 workers coming and going, a lot of traffic will be generated from the plant, which is already under construction on acreage at the intersection of Texas 130 and Harold Green Road.

With Tesla’s boom, much will be required from Texas 130, a four-lane highway that is being expanded to six lanes.

And what about the finished cars that will be rolling off the assembly line by 2022?  And the materials and parts that will be rolling into the plant?

Worthy of note: the Tesla property has no railroad line. If Musk wants to tie-in, it’s eight miles up Highway 130 to connect to an existing rail.

Maybe, Musk is planning on using Tesla semi-trucks to move new autos to market. Even so, the interstate highway options are somewhat limited. For long-haul trucking, Austin has the nightmarish Interstate 35, which goes to Dallas.

Elon Musk is an undisputed genius and it’s considered blasphemous, by some, to question his judgement. But for logistics, shipping and transportation, the Austin location is questionable.

The skeptic might say this site is “a future fail” when it comes to shipping and ingress/egress.

A Houston site would be vastly superior to Austin on the transportation/logistics score, as noted in this newsletter earlier this year.

Houston could have supplied Tesla with a site featuring deep-water access to the Port of Houston and significant railroad access with a rail spur on-site. And Houston has three interstate highways: I-10, 1-45 and I-69. And two airports.

Compared to Houston, Austin is flawed when it comes to transportation.

THE FICTION: The official word from the omnipresent “they” is this:

Tesla chose Austin over Houston because Austin has a strong tech workforce.

Austin does have a strong tech workforce. But this is an auto assembly plant Tesla is building. The average pay at the Austin Gigafactory is less than $50,000 a year. Two-thirds of the Tesla workforce will have no college education.

Yes, Austin has Google, Apple and Facebook.

But Houston probably has at least a dozen tech workers, or maybe even two dozen, who could cut the mustard at Tesla. We’re talking about an auto factory, for Pete’s Sake.

A couple of years ago, Amazon dissed Houston in its HQ2 competition.

Now they think Houston doesn’t have enough tech firepower to staff a Tesla car factory.

Perhaps Houston and Elon Musk could sit down face-to-face. Why wasn’t Houston selected?

“Just be honest and tell me,” Houston says. “What’s wrong with me?”

 

Commentary by Ralph Bivins, editor, Realty News Report


Sept. 14. 2020 Realty News Report Copyright 2020


Photo:  Downtown Austin. Photo credit: Ralph Bivins. Copyright 2020


File: Tesla in Texas

 

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