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Texas County approves tax breaks for a new Tesla factory near Austin

Elon Musk, co-founder and CEO of Tesla Inc.

Alberto E. Rodriguez | Getty Images

Travis County, Texas, has decided to grant Tesla tax breaks of at least $ 14.7 million to build a new auto plant and eventually employ thousands near the Austin airport.

The location where Tesla proposed to build its next “Gigafactory”

; is known as the Austin Green development. Tesla still has to buy the land there, which would cost an estimated $ 5 million plus at least another $ 1.1 billion to build the facility that will manufacture the cyber truck. The property borders the Colorado River.

District officials discussed the proposal in a closed session on Tuesday before hearing from speakers at a public hearing that was broadcast live on YouTube.

A local school district, Del Valle ISD, had previously voted for Tesla’s plan last week, which was referred to as the Colorado River Project LLC.

Tesla citizens, fans and critics spoke at several hearings before the district and the Travis County Commission in June and July.

Those who expressed their wishes included members of the Texas-based Tesla Owners Club, Tesla employees from California and Texas, and business owners who wanted their recruitment agencies, construction and automotive suppliers to become Tesla suppliers or service providers.

Those who preferred to give Tesla incentives primarily expressed a desire to bring jobs and income to the region for themselves or their children.

In February 2020, the Texas Workforce Commission reported 19,342 unemployed in Travis County, or a local unemployment rate of 2.6%. This number rose to 81,466 unemployed or a rate of 11.6% by May 2020 after Covid-19 outbreaks and state health contracts.

Tesla currently employs approximately 10,000 people in its only US automobile plant in Fremont, California.

Others, including environmental and labor representatives, as well as residents, expressed concerns about the lack of guarantees of occupational safety and minimum wages for people, including young students, who may be working in the factory in entry-level or low- and mid-level jobs.

On paper, Tesla has promised to provide a minimum wage of $ 15 an hour for food service and regulatory personnel. But it has not promised to create a significant volume of higher-paying jobs in the region.

Critics say the pay Tesla is willing to offer to low-skilled workers is insufficient due to rising rents, relatively high property prices, and scarce living space in the region (especially for first-time home buyers).

Critics also spoke about Tesla’s record of suppressing union efforts in his other factories and failing to acknowledge and correct workplace safety issues.

Many of those involved in Tesla’s security practices mentioned the way CEO Elon Musk downplayed the risks and severity of Covid-19, and the fact that he defied local health jobs in California to help workers in to bring the company’s Fremont-based auto plant back to the Covid-19 pandemic.

Tesla also has a troubled past when it comes to fulfilling commitments in cities where it has created important incentives to build factories.

For example, New York State officials wrote down $ 959 million in November 2019 to build and equip a Tesla solar module factory in Buffalo. The plant, announced in 2013, was to employ more than 1,000 people and produce photovoltaics, but never achieved its goals for solar production or employment. This year, Tesla requested an extension of the deadline for meeting these employee commitments in April, citing complications related to Covid-19.

More recently, Tesla has successfully built a car plant in Shanghai in less than a year with loans of $ 1.6 billion and other government support.

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