OPINION: Twitter, Tesla and one ruthless interloper

Nov. 21—If New Mexico ever established a hall of shame, Elon Musk would join Billy the Kid as a charter member.

Musk reigns as boss of Twitter Inc., the social media company he runs like a plantation. He busies himself these days by perfecting methods to exile the hired hands unless they bow before him.

True, you might say, but Twitter is headquartered in San Francisco. What do Musk's ruthless ways in a coastal metropolis have to do with a hall of shame in the high desert?

Musk's track record of cajoling, then using and discarding well-intentioned people, became public 15 years ago in New Mexico. He momentarily approached sainted status in the state, but his benevolent image didn't last long.

The public portion of the story began on Feb. 19, 2007, a blue-sky Monday in New Mexico. Musk, then 35 years old, was chairman of the board of Tesla Motors, a startup company that would produce high-end electric automobiles.

After pitting one state against another to drive up taxpayer incentives, Musk and Tesla executives were ready to unveil the location of their manufacturing plant.

Musk arrived in Santa Fe to join then-Gov. Bill Richardson for the grand announcement. Tesla executives promised to build their manufacturing plant on the west side of Albuquerque. Was there ever a moment so satisfying in an impoverished state desperate for private-sector jobs?

Richardson's staff estimated New Mexico offered $20 million in inducements to land Tesla. No one complained. The company looked like a whale.

For starters, Musk and company said Tesla would employ 400 people in Albuquerque. But the workforce might expand into the thousands as Tesla's cars gained popularity.

Richardson, a Democrat preparing to run for president, knew his triumphant remarks would reach a national audience. "Tesla is committed to clean energy and so is New Mexico," the governor said.

Trouble was, Musk and Tesla weren't committed to New Mexico.

Progress was nonexistent on the auto plant. By 2008, Tesla automobiles were still more a concept than a machine with rubber meeting road. The Los Angeles Times covered the story in its "Garage" column under a brisk headline: "Electric carmaker's route full of potholes."

The truth was harsher. Tesla was ready to detour. It had no interest in New Mexico once it could get a better deal from a richer, more populous state.

Sixteen months after choosing Albuquerque, Musk and company said New Mexico no longer was in Tesla's plans. The company would build its cars in California.

Then-Gov. Arnold Schwarzenegger had more public money to wave at captains of industry than did Richardson. California's incentives for Tesla included purchasing $100 million in equipment that would be leased to the company. If Tesla eventually bought the equipment, its acquisition would be tax-free.

Tesla's jilting of New Mexico was the beginning of a tailspin. A national recession began soon after, killing jobs and weakening the tax base.

Maybe New Mexico was never anything more than a pawn for Musk and other Tesla honchos as they maneuvered for maximum public subsidies. Whatever the truth, Musk wasn't pained by his dalliance with New Mexico. He survived it so well that he teased the state again.

In 2014, seven years after Musk claimed Albuquerque would be the site of Tesla's auto plant, his company had a new pitch. Tesla announced New Mexico as one of four finalists for a factory to manufacture batteries for its cars.

Once again, thousands of jobs were possible for New Mexico, at least according to a company whose word wasn't any good the first time. New Mexico's competitors for the battery factory were Nevada, Arizona and Texas. California lurked in the background, a contender in waiting.

Taxpayers are at risk anytime governments are foolish enough to compete against one another for a company. Musk encouraged such cutthroat competition.

Jon Barela was New Mexico's secretary of economic development during the sweepstakes for the battery factory. Barela once told me any deal the state proposed was never enough.

New Mexico residents by then were skeptical of Tesla's interest in the state. Even if Tesla was serious, New Mexico was the least populous place seeking the battery factory. It couldn't afford a company with so many other suitors.

Tesla chose Nevada for its battery factory. Its proximity to the manufacturing plant in California was one reason. Nevada's incentive package for Tesla topped $1.25 billion. Critics still say the state overpaid.

Musk is in a new era. He's making headlines and enemies for his treatment of Twitter's engineers and designers.

It's all business, just like it was in the flyover state of New Mexico, land of throwaway promises.

Ringside Seat is an opinion column about people, politics and news. Contact Milan Simonich at msimonich@sfnewmexican.com or 505-986-3080.