Possible job cuts by Tesla could cut into deal with Travis County
AUSTIN, Texas - On Friday, the Tesla Gigafactory was buzzing with activity. The prospect of job cuts and a hiring freeze didn't stop new vehicles from rolling out and being loaded onto transport trucks.
But throughout the morning, the company stock dropped as Wall Street reacted to a report by Reuters regarding a possible cutback. The report was based on an internal memo from Elon Musk to his company executives, stating he has a "super bad feeling" about the economy. President Biden downplayed the inflation fear, Musk said.
"While Musk is talking about that, Ford is increasing their investment overwhelmingly. I think Ford is increasing investment and building new electric vehicles. 6,000 new employees, union employees, I might add, in the Midwest, the former Chrysler Corporation, Stellantis. They are also making similar investments in electric vehicles. Intel is about 20,000 new jobs for making computer chips. So, you know, lots of luck in his trip to the moon. I mean, I don't know," said President Biden.
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A "cyber-rodeo-giga Texas" is what Tesla owner Elon Musk posted early Thursday morning. While the doors open to guests at 4 p.m., Musk posted on social media that festivities will actually start at 8 p.m., and he will give a speech around 9 p.m.
Despite the President's take, the economic warning from Musk is hard to ignore. Local business owner John Sallas took notice.
"He stays on top of the financial situation. And, you know, he's very shrewd in business. So it doesn't surprise me that he knows what's going on," said Sallas.
Travis County officials are also keeping a close watch. The multi-million dollar incentive package that brought Tesla to Austin does not require a job cut notification. But to qualify for tax rebates, Tesla does have to create a set number of permanent jobs. A little more than 2,000 in the second year of operation and 5,000 by the fifth year.
Travis County Judge Andy Brown was not available for comment, but Precinct 1 Commissioner Jeff Travillion, in an April 7 interview, indicated the deal has teeth.
"We think the wise step that the Commissioners Court took was they made it a reimbursement tax contract, meaning, we started out, or Tesla started out, working with a contract and when that contract is fulfilled, then the taxes will be rebated. So, we will only see the tax dollars go out when we see all the things that we agreed to happen," said Travillion.
While the county job audit of Tesla will not happen until next year, John Sallas, like many others, is bracing for what could a financially tough summer.
"Oh, you know, I'm just going to keep my eyes on things and try to do what I've been doing, which is just floating above this, this, inflation situation," said Sallas.
In a statement from Austin Community College, officials said their training partnership with Tesla has not been impacted by the company's job situation. A 100 student manufacturing class by ACC is about to begin, with another set for this fall.