California Prefers Trains to Nowhere over Rocket Ships

In the grand scheme of the ongoing economic disaster being wrought by Sacramento, it’s perhaps not a big thing, but it’s very symbolic. On the same day that the California legislature passed a law authorizing an unaffordable low-speed, “high-speed” train along the heavily traveled corridor connecting the San Joaquin Valley metroplexes of Bakersfield and Madera (where only three percent of the projected riders live), a promising young California company, like so many in recent years, announced that it was pulling up at least some of its Golden State stakes and heading to the Lone Star State.


Once upon a time, southern California was a center of human spaceflight. In the sixties, Rockwell International and McDonnell Douglas (since absorbed into Boeing) built many of the machines that took men to the moon, and later, Rockwell built the space shuttle in Palmdale and Downey, and McDonnell Douglas was a major contractor for the space station in Huntington Beach. But in the nineties, NASA compelled the companies to move most of their human spaceflight business to Texas, Alabama, and Florida, where the costs were lower, and by the turn of the century, there was very little left. Fortunately, a renaissance has begun. In the past decade, a number of new companies have formed in southern California dedicated to putting humans into space, most notably Space Exploration Technologies in Hawthorne, near Los Angeles International Airport, and several companies in the desert spaceport town of Mojave, a hundred miles north.

But on Friday, XCOR Aerospace announced that after thirteen years of operation in Mojave, where it was founded, it is moving its primary research and development activities to Midland, Texas, where it’s being offered millions in incentives by the state.

There are certainly downsides to the plan. It’s never easy to abandon friends and homes for a journey half a continent away, and there was a reason that the company was founded in Mojave. In the last decade, the town has become a hotbed of aerospace innovation. XCOR is just one of several companies pushing the envelope not just of performance, but also of cost effectiveness in spaceflight. This is because of the town’s favorable flying weather and access to the large, restricted airspace just to the south at Edwards Air Force Base and NASA’s Dryden Flight Research Center. Its proximity to Los Angeles, with its remaining technological infrastructure, has been invaluable as well, not to mention the culture, and the variety of southern California geography and scenery. From beaches to desert to mountains, L.A. is an attractive vicinity for employees. West Texas, in contrast, is hundreds of miles from any major urban center and farther still from any ocean.


What Texas offers, though, beyond the direct financial incentives, is a much more business-friendly and employee-friendly environment. Even people with modest salaries pay almost ten percent of their salaries in California income tax. In Texas, that rate will go to zero. In California, Proposition 65 requires warning signage for every fluid on site, with fines for failure to post — just one more burden on a company that builds and operates rocket-powered vehicles. When California’s idiotic new carbon trading law comes into effect this year, the company is going to have to start tracking every gallon of fuel it burns and report it to the state. No one in Texas will care.

The company isn’t abandoning  California entirely. The company says that it should be thought of as an expansion, rather than a move. At a press conference on Monday, Chief Operating Officer Andrew Nelson said that they might even hire a few more people in Mojave. Operational flights will continue in Mojave (and likely at other spaceports in the future) — the location will still offer spectacular views from a hundred kilometers. But the center of gravity for research and development, including flight test, will move to Midland. It won’t happen immediately. The initial version of the company’s Lynx spaceplane will continue on in Mojave, both to avoid disruption of its schedule (they want to have initial flights by the end of the year) and because it will take a year or more for Midland Airport to get its own spaceport license from the FAA.


But the handwriting is on the wall. Rather than seeing significant growth in California, much of the company’s growth will be in Texas, and perhaps Florida, or other more business-friendly places, if it also moves into large-scale engine production in the future, as is rumored.

Could Mojave have competed with Midland’s offer? Cash-strapped California might credibly offer an excuse that it can’t afford to hand out the millions in financial incentives that Texas is, if it weren’t for the fact that they just approved the “high-speed” boondoggle that will cost the state’s taxpayers billions. But the real problem is the regulatory environment. Jeff Greason, XCOR’s CEO, warned Governor Brown’s envoy in April that “California can have either all the regulation or all the business, but it can’t have both.”

But to little avail:

[Mojave Air and Space Port Manager Stuart] Witt said that Knudsen told him he had no idea how much was happening in Mojave, and that he would report his findings back to the governor’s Cabinet. However, Knudsen warned that there’s only a limited amount the state can do given current fiscal and policy constraints, Witt added.

For “fiscal constraints” read “too many promises of pensions to prison guards and teachers, too many trains to nowhere, and too little revenue as we destroy the businesses that remain in the state.” For “policy constraints” read “irrational fantasies that by having our own carbon trading scheme we will somehow heal the planet.” And so, the once-visionary state that long ago nurtured the fledgling aerospace industry is apparently choosing to use taxpayer money to fund a nineteenth-century transportation solution doomed to failure, while chasing away an innovator of a twenty-first century transportation business that had been trying to revive it. And the gold continues to tarnish in the once-Golden State.



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