California still has a bright economic future despite Tesla’s exit (Newsom)

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OAKLAND – Gov. Gavin Newsom on Friday tried to put a brave face on the shake in California’s prestige brought on by Tesla’s decision this week to move its headquarters from Silicon Valley to Texas.

Tesla CEO Elon Musk announced the decision to move the company headquarters from Palo Alto to Texas, a defection that helps solidify the narrative for some that California maintains a hostile business climate. But the governor did not have it.

“California has been the fastest growing economic jurisdiction in the world for the past five years,” Newsom said after a bill signing event in downtown Oakland on Friday.

Newsom has touted California’s 21% gross domestic product growth over the past five years. The governor noted that this rate of economic expansion exceeds Texas’ performance of 12% in the state’s GDP growth over the same period.

Musk has been fiercely critical of the business climate in California and first threatened to move his company’s headquarters to Texas last year after being hit by an order to shut down Tesla’s manufacturing plant in Fremont for the first days of the pandemic. “Frankly, it’s the last straw,” he tweeted at the time.

But the governor insisted California deserves gratitude for supporting Tesla financially over the years.

“California provided hundreds of millions of dollars in tax subsidies to Tesla,” Newsom said.

The state also continues to invest in electric vehicles and green car technology, the governor said.

“I have a reverence and deep respect for this individual,” Newsom said, referring to Musk. “I also have a deep reverence for the state and what we have done to support these investments. We will continue to have no par in terms of economic growth.

Despite the governor’s optimistic predictions, California lags the country in terms of recovering all the jobs lost due to the start of business closures to fight the coronavirus.

By the end of August, California had recovered just 62.1% – less than two-thirds – of the jobs it lost in March and April 2020, the two months that marked the start of lockdowns for curb the spread of the deadly virus. .

In contrast, the United States has recouped 76.2% – more than three-quarters – of the jobs lost when the nationwide shutdowns began.

California lost 2.71 million jobs in those two months.

From May 2020 to August 2021, the state recovered 1.69 million jobs. But that leaves a deficit of over a million jobs for California in terms of recovering lost jobs.

Tesla isn’t the only one announcing the exit of its massive California headquarters. Oracle has decided to move its headquarters from Redwood City to Texas. Hewlett Packard Enterprise has also moved its headquarters from San Jose to Lone Star State.

But even amid news of the headquarters move, the automaker has entered into a new lease for 325,000 square feet of office space in Palo Alto.

Discussion of Tesla’s exit took place in a question-and-answer session after the governor signed a legislative package to help support the state’s rebound from COVID-induced job losses.

The Governor signed three Bills – SB 314, drafted by State Senator Scott Wiener, D-San Francisco, SB 380 by Senator Bill Dodd, D-Napa and AB 61 by Assembly Member Jesse Gabriel, D-Encino – which were designed to help restaurants, bars, breweries and wineries.

Certain provisions of the legislative package offer restaurants and drinking places greater flexibility and possibilities to expand outdoor food and beverage services on a long-term basis or even permanently.

“Eat your heart out, Paris,” Newsom said.

Other provisions in the group of bills allow restaurants, bars, breweries and wineries that sell food to offer take-out alcoholic beverages with food orders until December 31, 2026.

Nigel Jones, chef and owner of Kingston 11 Kitchen, a Jamaican restaurant in downtown Oakland, welcomed the help of the newly signed laws.

“Over the past year and a half we have battled the pandemic,” Jones said at the event. “But we bounced back. When the pandemic hit, we lost about 70% of our business. ”

Despite continued departures from headquarters in California and the many business problems plaguing the state, the governor painted a picture of robust growth for the state’s economy.

“Our best days are ahead of us,” Newsom said.


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