Published:
May 12, 2020 7:56 PM

Ex-Facebook Exec Slams California for Railroading Tesla and Elon Musk

As Elon Musk reopens his Fremont factory in defiance of local orders, another giant in tech spoke up in support of his approach to reopen.
  • Elon Musk is facing off with his local government over reopening the Fremont Tesla plant.
  • A former Facebook executive who now chairs Virgin Galactic says he’s supporting Musk.
  • Social Capital CEO Chamath Palihapitiya slammed the COVID-19 lockdown policy as incoherent.

An early Facebook executive and venture capitalist is siding with Elon Musk in his spat with the government over ending lockdowns for his business.

Elon Musk is waging a bitter public battle with the state of California and Alameda County. The Tesla CEO has resumed operations at Tesla’s Fremont factory in defiance of the local government.

Source: Twitter

The state allowed some businesses to reopen Friday, but Alameda County is keeping the carmaker on lockdown.

In response, Elon Musk threatened to stop making cars in California altogether. That could – incidentally – save Tesla a lot of money on California taxes and industrial energy costs.

Musk decided to reopen Monday. He tweeted that if there are any arrests, he’s the only one who should be held responsible for the decision.

That same day, Alameda County sent a letter to a top Tesla employee safety officer ordering the plant to cease operations.

Chamath Palihapitiya Slams Incoherent Policy

Chamath Palihapitiya, founder and CEO of Social Capital and chairman of Virgin Galactic, is supporting Elon Musk in his fight to reopen the business.

On CNBC’s “Squawk Box,” Palihapitiya – who was also an early Facebook executive – said:

I have been and will continue to be a huge supporter of his.

The Canadian technology venture capitalist said there’s “no coherent” policy response to COVID-19. He called the tangle of federal, state, and local orders and regulations “incredibly confusing.”

What you have right now is this issue where the federal government has a specific set of guidelines. People may think that they fall into those guidelines. Then states then issue guidelines. And then on top of that, you have regulations at local levels. When you put them all together, it’s incredibly confusing.

Palihapitiya said there’s no clear way for business owners to move forward in this messy, ad hoc regulatory environment.

So if you’re a business owner, and you’re trying to figure out how to get back to work, because you believe the risks are manageable, there’s no clear way that you can go and actually get the approval to do so.

But don’t think the VC is pro-business and anti-labor.

He raised eyebrows and the ire of Wall Street last month when he said the government should let billionaires and hedge funds fail instead of bailing them out. He argued that structured bankruptcy for failed companies would wipe out investors while saving the workers’ jobs.

Elon Musk Is Trying to Work with Government

Whatever your opinion of Elon Musk, he’s apparently doing what he thinks is right. | Source: REUTERS/Rashid Umar Abbasi

The CNBC host then stopped Palihapitiya to ask:

Chamath, that’s the policy issue. My question to you is, do you support Elon Musk saying local laws be damned in this case– I’m moving ahead?

But Palihapitiya would not agree to this media narrative framing the controversy as Elon Musk being obstinate and antagonistic with the authorities. He pointed out that government officials in California have been inexcusably rude to Musk and Tesla.

A California state assemblywoman, Lorena Gonzalez, even cursed Elon Musk on Twitter Saturday.

Source: Twitter

Palihapitiya found that remark inappropriate and unhelpful:

I don’t think he’s saying local laws be damned. I think he was trying to actually get time with the folks in Alameda. And frankly what I saw on Twitter was, you know basically literally somebody telling him to F-off. It was not the kind of discourse you would expect from public officials who are responsible for engaging with local business owners.

Whatever your opinion of Elon Musk, he’s apparently doing what he thinks is right, in a tough spot, regarding a business that’s very important to him. And he’s taking full responsibility for his actions.

Our society generally holds people who act this way in high regard. And when the media is sympathetic to those individuals, it calls this behavior “leadership.”

Disclaimer: The opinions expressed in this article do not necessarily reflect the views of CCN.com.

This article was edited by Josiah Wilmoth.

W. E. Messamore @thehuli

Markets Contributor for CCN living in Nashville, Tennessee. Bachelor of Business Administration from Belmont University in 2009 (majored in Entrepreneurship). Organized Senator Rand Paul's first and second online fundraisers in 2009. Correctly predicted the bitcoin bull market of 2019. Roving editor for the Independent Voter Network since 2013. Email me | Follow Me on Twitter (followed by: fmr Rep. Ron Paul (R-TX), Sen. Rand Paul (R-KY), fmr NM Gov. Gary Johnson, and Rep. Thomas Massie (R-KY))