As Tesla made its first public pitch to bring its Cybertruck factory to Austin, Texas on Tuesday, the company faced concerns from citizens about its treatment of workers, the proposal’s impact on the local housing crisis, the need to give the automaker tax breaks, and most of all, CEO Elon Musk.
About 45 residents of Austin and the surrounding area spoke about the factory deal on Tuesday at a virtual public meeting held by the Travis County Commissioners Court, the policy-making and administrative arm of the local government. Many objected to Musk’s behavior during the coronavirus pandemic, including how he reopened Tesla’s California vehicle factory in violation of a local health order, sued the county where the factory is located, and spread misinformation about the virus. Texas is currently experiencing a “massive outbreak” of COVID-19 cases, according to Gov. Greg Abbott.
Tesla has spent the last few months soliciting offers for its next US factory from “nearly every state and governor East of the Rocky Mountains,” Rohan Patel, the company’s senior global director of public policy, said at Tuesday’s meeting. But Tesla is now focused on bringing the factory, which is where it will make the Cybertruck and Model Y SUVs bound for the East Coast, to two specific places: either Austin, or Tulsa, Oklahoma.
Before the community members spoke, Tesla offered the most detailed look yet at what it wants to do with the factory, as well as what it wants from Austin and Travis County in return. The company told local officials that it will hire around 5,000 people for “middle-skill” jobs if the factory winds up in Austin, with an annual average salary of $47,147 and entry-level positions starting at $35,000. Tesla has also said the factory’s presence would generate about 4,000 additional jobs in the area.
Tesla is eyeing a collection of properties known as the Austin Green development. The company has applied to buy the land, totaling around 2,100 acres, for $5 million. Much of the land is currently unused, though a sand and gravel mining business is still in operation in the heart of the proposed factory location. If built, the Tesla factory would be just a few miles from the Austin-Bergstrom International Airport. The site also straddles a major highway, and butts up against farmland, a small park, some residential neighborhoods, and multiple new subdivisions still under construction. The Southeast corner of the property is bordered by nearly two miles of Texas’ Colorado River.
“The potential is just great for recreation, for beauty, and the vision of being able to potentially transform an old mining site into a sustainable factory with recreational opportunities — that’s just a vision that sits perfectly with our mission,” Patel said during Tuesday’s meeting.
Tesla ultimately expects to spend about $1 billion on the new factory. But the company says it’s seeking relief from Texas’ high property taxes. Tesla is asking a local school district for a property tax break that would save about $68 million over 10 years, and one from Travis County that would save around $14 million across that same time frame.
Other states and local governments have offered Tesla far more significant tax breaks, including completely eliminating property and other business taxes for 20 years or more, Patel said Tuesday.
“We’re not asking for that in Texas, but I’ve asked for an agreement similar to what other large manufacturers have in place in order to make the economics work for us, but maybe more importantly, provide a win for the county to provide a win for the school districts and a win for the community,” Patel said.
The tax rebates being discussed in Texas are, to date, far less significant than the $1.3 billion tax incentive package the company received for its Gigafactory in Nevada, or the hundreds of millions of dollars SolarCity got for its factory in New York before merging with Tesla.
Tesla has agreed to put at least 10 percent of the county rebate back into the local community, and is already talking to local schools and organizations about possible training programs and affordable housing projects. But some Travis County residents still took issue with the proposal at Tuesday’s meeting.
“I feel that our tax dollars could be better spent improving what we have never addressed from day one: the horrific living conditions, the pollution, the crime, and the poverty of the resident families of Eastern Travis County,” said Cecilia Ryan, who lives less than a mile from the site. “5,000 jobs will not help this situation.”
Others voiced concerns about the salaries Tesla is promising. “This proposal touts jobs starting at $35,000 a year, which would have sounded great in 1985,” one resident said.
Patel stressed earlier in the meeting that the quoted entry-level salaries are a “floor” that is “really not a hard one for us to leap over.” He also pointed out that Tesla gives all employees stock in the company.
Some residents, including local union leaders, brought up Tesla’s checkered history with worker safety. They mentioned the company’s refusal to allow OSHA to inspect the Nevada Gigafactory in 2018, and the recent National Labor Relations Board decision that Tesla’s union-busting efforts broke the law. Travis County commissioners said Tuesday that the local UAW and AFL-CIO have spoken to the court about considering wage and working condition protections.
“I’ve heard throughout this presentation today about what a wonderful employer they are. But I believe firmly when someone shows you who they are, believe them,” said Kolby Duhon, a member of the local AFSCME union for Austin and Travis County employees. “I don’t make this accusation lightly, but Tesla representatives on this call have absolutely lied to you today about their record.”
But the most consistent theme in the residents’ comments was criticism of Musk. Multiple community members took issue with how Tesla’s CEO initially resisted the local county health order in California in March. Some were dismayed by his decision to have Tesla sue Alameda County when he wanted to reopen, and how Musk eventually had the company restart production in violation of that public health order in May. Those criticisms come as Texas finds itself facing dramatic daily increases in the number of confirmed cases of COVID-19.
“Elon Musk has called over and over again for rolling back the widespread measures put in place to slow the spread of the virus, and spouted dangerous, Trumpian talking points about patently false benefits of chloroquine,” Duhon said. “And when they do back out of their end of the agreement, as they’ve shown a proven record of doing, they’ll do so as they did with Alameda with better attorneys than we could ever afford to defend it.”
“How could we allow a company to come into our community that would drag Travis County down to federal court and here in Austin for legally enforceable health orders?” asked Austin resident Jordan McRae.
More than one called Musk a “billionaire playboy,” and suggested that he and Tesla did not need the proposed tax rebates.
“I‘m extremely disappointed that these tax breaks are being considered for a billion dollar company, and a billionaire playboy who does not necessarily honor all of his agreements that he makes with the governments in the areas where … he sets up his company,” Trish Niswander, another AFSCME member, said. (Tesla is currently valued even higher than that, with a market capitalization of around $178 billion.)
Despite these criticisms, there is obvious excitement for the factory. The commissioners said they received letters of support for the project from Huston-Tillotson University, the University of Texas, Austin Community College, the Austin Regional Manufacturers Association, and Austin’s Hispanic, Asian, Black, and LGBT Chambers of Commerce. The commissioners also said they had received about 190 emails from Travis County residents in support of the proposal, and about 60 against.
Many who spoke at the meeting in support of the factory were Tesla owners, and a few were even employees. One assistant service manager praised the company’s “excellent affordable health care” and other benefits, which he said are the same that Tesla corporate employees “and even Elon” have access to.
One Austin resident and Tesla owner, Diane Webb, said she has a “strong feeling that I would know by now if [Tesla] was not a good company.”
“To me, the state of Texas has always represented free enterprise competition and ingenuity, our tagline has been ‘Texas is open for business.’ And we really need to be open for this one. Even if I did not own a Tesla, I would think the factory is a good idea. But it’s not just a good idea. It’s a great one,” Webb said.