The California labor board rejected SpaceX’s grant application amid a dispute with Tesla and Elon Musk.

California’s program that funds employee training considered the grant application to train 900 existing employees and 300 new ones. The Employment Training panel’s staff recommended that the board approve the grant in its May 15 meeting.

As reported by¬†SpaceNews, the panel members, which consisted of industry representatives and organized labor, questioned the suitability of providing state funding to Elon Musk’s company. They’ve cited Musk’s threats in moving Tesla, his electric automobile country, out of state to Nevada or Texas.

This threat on May 9 was between Musk and the officials of Alameda County. The Fremont factory has now been approved to continue operation. However, this is Tesla and not SpaceX. Members of the panel believed that Musk’s plan B for Tesla makes it hard to support a grant for SpaceX as it is both under his control. For that reason, five members out of eight voted to reject the grant proposal.

Members of labor organizations had asked panel members to reject the SpaceX application. In a May 14 letter, they wrote, “Musk has been the recipient of billions of public dollars over the past decade for several companies. And he used those dollars to run businesses that tamp down on the collective bargaining rights of employees and disregard the safety of workers.” Once again, this letter does not mention any issues with SpaceX but of Tesla’s dispute against Alameda county.

The said labor organizations are happy with the outcome. California Labor Federation tweeted, “You will absolutely love to see it. California will NOT be subsidizing Elon Musk’s SpaceX.”

Despite the celebration, it’s highly unlikely that the panel’s decision will profoundly impact SpaceX and its plans. After all, the company is set to contribute $1.1 million to the total cost of training.

The grant proposal specifies the group that would be retrained. Six hundred technicians, 200 engineers, and 100 managers and supervisors, part of the old staff, will be retrained with new 200 technicians and 100 new engineers. These employees would work on SpaceX’s Starlink constellation and reusable launch system.

Tesla may be in hot waters as of the moment. Still, SpaceX is in the right place with its Hawthorne factory operating during the pandemic under the federal government’s classification of aerospace manufacturing as a critical industry. Gwynne Shotwell, president and chief operating officer of SpaceX, said that half of the company’s engineering staff is working from home. In the MAy 1 NASA briefing, where they spoke on the upcoming Demo-2 commercial crew mission, the official said that the ones working on site are using personal protective equipment and exercising social distancing as done outside.

SpaceX has no plans to leave California. Officials are pitching their states for the companies to move in. Houston Mayor Sylvester Turner wrote to Musk that his city would be an ideal home for both companies. In the May 15 letter, he wrote, “As the only U.S. market that can immediately meet the production needs of Tesla and SpaceX, Houston provides a single solution for your operations.”

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