SpaceX, the massive aerospace company known for its innovative rockets and space capsules — with billions of dollars worth of contracts with the federal government — will move its headquarters from Hawthorne to Texas, founder Elon Musk announced on the social media platform X on Tuesday, July 16.
While the precise impact wasn’t immediately known, the relocation could prove a blow to the South Bay and regional economy, though at least one economist cast doubt on that.
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SpaceX, according to a September 2023 document filed in the U.S. District Court for the Southern District of Texas, employs more than 13,000 people at its facilities across the country, including in California.
The aerospace industry as a whole, according to the Los Angeles County Economic Development Corporation, accounts for more than 57,000 jobs countywide — with an average wage of $136,473, as of 2022.
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Hawthorne city officials declined to comment about the company’s decision to relocate or answer questions about how the change could impact the local job market. SpaceX’s media representatives did not return requests for comment.
Musk, who also announced X (formerly Twitter) will move its headquarters from San Francisco to Austin, said a new law signed Monday by California Gov. Gavin Newsom that bars school districts from requiring staff to notify parents of their child’s gender identification change was the “final straw.”
“I did make it clear to Governor Newsom about a year ago that laws of this nature would force families and companies to leave California to protect their children,” Musk wrote on X.
Musk has been increasingly involved in politics in recent months. Musk endorsed former President Donald Trump mere minutes after the Republican nominee was rushed from the stage at his rally in Pennsylvania after an attempted assassination.
Tesla, of which Musk is CEO, moved its corporate headquarters to Austin from Palo Alto in 2021.
Musk has also said that he has moved his residence from California to Texas, where there is no state personal income tax.
Besides Musk’s posts on social media, neither he nor other SpaceX representatives provided any substantial details on Tuesday about what the move will actually entail. And SpaceX employees, outside of the company’s Hawthorne headquarters on Tuesday, said they had been directed to avoid speaking with media — or hadn’t heard about the news at all yet.
But the move, according to one economic expert, might not have as massive an impact on the local economy as it may seem.
“Headquarters is where the C-suite guys are hanging out and some of their operational folks,” Christopher Thornberg, the founding partner of Beacon Economics, said in a Tuesday interview. “We don’t know if they’re going to be moving any of their production facilities, any of their production workers or their line management.”
There are plenty of other companies who’ve also moved their headquarters out of California in the past — including Toyota and Boeing — which had little real world impact on the state’s job market, Thornberg said.
SpaceX’s 1-million-square-foot campus in Hawthorne, though, is home to more than just offices — it’s also the company’s primary production and processing facility for its Falcon 9 workhorse and Falcon Heavy rockets.
Even if Musk does decide to move those larger SpaceX operations out of state, though, it remains to be seen whether that will have a material impact on the local economy either.
“That’s an incredibly expensive decision to make,” Thornberg said. “(And) people who live here, live here for a reason — and you’re not going to convince a lot of these people to get up and move to Texas, simple as that.”
For those reasons, Thornberg said, moving a significant portion of SpaceX’s actual business operations to another state would likely be a difficult and questionable financial decision — especially in the wake of serious challenges the company is dealing with.
Just last week, a SpaceX Falcon 9 mission — launched from the Vandenberg Space Force Base in Santa Barbara County — attempting to release 20 Starlink satellites into low-Earth orbit failed several minutes into the flight.
Because of an upper stage engine failure, the satellites were essentially dropped into the wrong orbit — only 84 miles above Earth, less than half of the intended distance — and were left there to eventually fall back down through the atmosphere.
The Federal Aviation Administration, shortly after the incident, issued an order grounding all Falcon 9 missions, at least until SpaceX conducts a thorough investigation into the cause of the incident.
“The FAA will be involved in every step of the investigation process and must approve SpaceX’s final report, including any corrective actions,” the FAA said in a Thursday, July 11, statement. “A return to flight is based on the FAA determining that any system, process, or procedure related to the mishap does not affect public safety.”
The mishap might have an impact on some of SpaceX’s crucial business. The Falcon rocket is also used to get people to space.
Entrepreneur and billionaire Jared Isaacman is scheduled to participate in the world’s first private spacewalk later this month, with the Falcon rocket also anticipated to take NASA astronauts to the International Space Station in August.
But if SpaceX, which opened in El Segundo in 2002 before eventually moving to Hawthorne, is unable to resolve the investigation and get FAA approval to fly the Falcons again, those missions could be delayed.
“Does (Musk) really want SpaceX — which just had a major disaster — to lose half of its workforce?” Thornberg said. “The expertise necessary to do this kind of stuff is not easy to come by.”
The Tuesday announcement, Thornberg added, appears to be more of a political statement than anything else.
“He’s just making a statement — he’s just being a petulant brat,” Thornberg said. “You don’t stomp your little feet and say, I’m taking my ball and not playing anymore, right? If you want to change California, lean in and be a positive influence.”
But still, the news has caused concern form some — despite few details about the move coming to light at this point.
Mike Gruntman, a professor of astronautics at USC, said dozens of his students have gone on to intern and work at SpaceX over the past 20 years.
“Southern California is one of the most prominent parts of the world in this industry, and (the SpaceX move) is a tremendous loss,” Gruntman said. “These big companies have projects, too, that include smaller contractors, which will likely be affected.”
It’s unclear, though, how the decision will impact SpaceX’s other business operations in Southern California — though at least one other major facility appears set to stay at its current location in Long Beach.
SpaceX subleased a marine terminal from the Port of Long Beach to house its West Coast rocket recovery operations in 2021. Long Beach city officials, at the time, hailed SpaceX’s arrival at the port as another win for “Space Beach” — the colloquial term the city uses to describe its aerospace industry — arguing it further cemented the city as leader in the industry.
Long Beach Mayor Rex Richardson announced earlier this month that SpaceX had renewed its POLB lease for another five years, and planned to double the facility’s footprint.
Loren Simpson, the mayor’s communications director, said Tuesday that the city isn’t “aware of or anticipating any impacts” on the facility as a result of Musk’s announcement.
Staff writer Delilah Brumer, The Associated Press, Bloomberg and The New York Times contributed to this report
