On July 16 2024, Elon Musk shouted from the proverbial rooftops that he will move SpaceX out of California to Boca Chica, Texas. By his own admission, he is not moving only for corporate advantage, value, or profitability, but also for politics. (He is also moving X, aka Twitter, from San Francisco to Austin, likewise for political reasons; he originally bought Twitter for ideological reasons.)Â
Ironically, Musk’s announcement came the day after another Musk company, Tesla, reversed a large number of recent California layoffs in Fremont, CA. Likewise, only two years after moving Tesla’s management to Texas with great fanfare, he brought the global engineering team back to Palo Alto, CA.Â
While Elon Musk’s resources may permit him to do whatever he wants, I suspect the SpaceX story will end up looking a lot like Tesla’s. If so, in a few years, SpaceX management might in a few years be right back where they started.
It is very easy to say you are moving a company.Â
It is only a little bit harder to actually move a company of programmers and office workers. Aside from employees who may not want to go, the barriers to doing so are relatively low.Â
Moving a manufacturing operation like that of the Falcon 9 is a whole different kettle of fish. You’re not just moving computers and monitors and people to another already furnished office. You’re moving multiple entire factories, including jigs, tooling and heavy machines.Â
In addition, you are moving or recreating institutional knowledge and skilled labor.Â
A finely honed manufacturing operation like that which produces the Falcon 9 has a culture — a network of interpersonal relationships between and among managers and engineers. They have expectations and ways of doing business together — all of which have to be recreated at the new location without disrupting production. The barriers to such a move are very high.
Musk seemed to acknowledge as…
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