News Column

Entrepreneur Elon Musk Envisions World Beyond Earth

Sept. 10, 2012

Charlene Vandini

Elon Musk

SpaceX is the third component of The Future According to Musk.

In a 2007 interview with Inc. magazine, which had named him its entrepreneur of the year, Elon Musk identified three areas that would affect the future of humanity: the Internet, sustainable energy and space exploration.

Musk, the 41-year-old founder, chief executive officer and chief designer at Space Exploration Technologies Corp., is a player in all three. His net worth is estimated at almost $2 billion, but he draws an annual salary of $1. He believes SpaceX will land astronauts on Mars within 10 years, 15 to 20 years at the most.

Now, SpaceX is eyeing the Boca Chica Beach area of Cameron County for the site from which it will launch its rockets over the Gulf of Mexico and into space.

County and Brownsville city officials actively are courting the company, which it sees as the engine that that could drive the region's economic development and put the Rio Grande Valley on the map.

Musk's journey to Mars began when he left his native South Africa in 1988 at age 17 and obtained a Canadian passport based on his mother's Canadian citizenship. He enrolled at Queen's University but transferred two years later to the University of Pennsylvania on a full scholarship. He earned his bachelor's degree in economics from the Wharton School there. A year later, he earned a second bachelor's degree, this one in physics.

Part one of his vision -- the Internet -- came in 1995. He enrolled in Stanford University's graduate program for applied physics but dropped out after two days. With his brother Kimbal, he started Zip2, a company that provided software for online publishing. Four years later, he sold Zip2 to a division of Compaq Computer Corp. for $307 million in cash and $34 million in stock options.

His next online venture, in 1999, was a global online payment system that became known as PayPal. Fueled by the growing e-commerce segment of the economy, PayPal was sold in 2002 to eBay for $1.5 billion in stock.

Musk, with a stake of about 12 percent, was PayPal's largest shareholder.

Moving from the Internet, Musk embarked on the second pillar of his vision: sustainable energy. He launched Tesla Motors, to design, manufacture and market electric cars. The company is named for Serbian-American Nikola Tesla, an inventor, electrical and mechanical engineer, and futurist, who developed the alternating current. Tesla became reclusive and died penniless in 1943, and gained a reputation as "mad scientist."

Tesla Motors already has built more than 1,500 Tesla Roadsters, which Musk described in a December 2011 Wall Street Journal interview as "cool" and "beautiful." The Roadster can travel 250 miles on a single charge and can accelerate faster than any gas-powered car. It sells for $110,000. Musk drives one. Actor George Clooney has one, too.

Forbes magazine estimates the worth of Musk's 32 percent stake in Tesla at about $1 billion.

Musk, in that same WSJ interview, said another Tesla, the Model S full-size sedan, will sell for $50,000 and will be in production this year. It can fully recharge in 45 minutes, and if it is charged by electricity that is generated by a coal-fired plant, it still is better for the environment than if run by fossil fuels, he said.

In expanding his sustainable energy vision, Musk is the largest shareholder and chairman of the board of directors of Solar City, which designs and installs solar power systems. He told Inc.'s Max Chafkin in September 2008 that Solar City could turn out to be his most profitable venture. It already is the largest provider of solar energy in California and is poised to expand across the United States.


More than a decade ago, Musk envisioned the Mars Oasis: landing a greenhouse on Mars and growing food plants. But he realized the project was impeded by the lack of rocket development. That realization became the seed from which SpaceX grew.

He has called this his passion: space exploration with an eye toward economical space travel and, ultimately, the colonization of Mars. He has invested $100 million of his personal wealth in the venture.

This, from a man who was born in 1971 and has no memory of 1969 and the first moon landing.

SpaceX in 2008 was awarded a $1.6 billion NASA contract to service the International Space Station after the last space shuttle was taken out of service, leaving NASA with no way to supply the orbiting laboratory. SpaceX is now a contender for a government contract for manned space flight.

Its manufacturing headquarters is in Hawthorne, Calif., in a large building where Boeing once built commercial jet fuselages. SpaceX has 1,400 workers there.

Musk took CBS News' "60 Minutes" reporter Scott Pelley on a tour of the site, where Pelley observed that metal goes in one end and a rocket emerges from the other, a process Musk called more economical and efficient than multiple manufacturers at several locations building components to be assembled at yet another site.



SpaceX has another installation, its rocket test site, in the small Central Texas city of McGregor, about 18 miles southwest of Waco.

Officials there who have come to deal with SpaceX gush about the company as a "corporate citizen" of their city and school district.

McGregor schools Superintendent Kevin Houchin easily can list examples of SpaceX's largesse: All students from kindergarten to eighth grade are given backpacks, and the 20 science club students who participate in science fairs and competitions are given T-shirts, courtesy of SpaceX.

The company sponsors the high school rocketry program, which was started four years ago. It has built a team from a cross section of students: boys and girls, some of whom Houchin fondly described as the "nerds" and "geeks" who write the code, working with teammates who are the mechanics who translate the code into actual rockets.

"SpaceX has gotten our kids excited about science," Houchin said. "We have a kid right now at (the University of Texas) in the aeronautical engineering program with the sole purpose of coming back to McGregor and work at SpaceX."

He cites another example of SpaceX's place in the community. When the high school held an enchilada dinner to raise money for the annual drug-free graduation party, SpaceX bought 200 dinners that were delivered to the company's workers.

Houchin called the company "our biggest and most important partner," and said the corporate generosity is not limited to McGregor ISD, but extends to other nearby school districts.

Musk comes to McGregor several times a year, Houchin said, describing the young billionaire as "dynamic" and "low key." Other adjectives he uses are unpretentious, personable, very approachable -- a "down-home guy" who is genuinely interested in the school district.

Dressed in jeans and a golf shirt, Musk mingled with the community at a well-attended annual picnic. "I bet there were a couple thousand people there," Houchin said.

Gilbert Salinas, executive vice president of the Brownsville Economic Development Council, was at that picnic, too. He remembers Musk posing for photographs with residents and their children, talking with them. Genuine and down-to-earth, is how Salinas describes him. The picnic included a stage and music. When Musk was called to the stage and introduced, there was resounding applause for him, a corporate rock star.

Kevin Evans, the city manager in McGregor, said SpaceX "has done everything they've said they were going to do."

Explaining how SpaceX found McGregor, Evans said the city's 9,000-acre industrial park is a former military site that was returned to the city in 1998 when the Defense Department declared it surplus.

Beal Aerospace came in and wanted to compete with NASA. It built a large tripod test stand, and went bankrupt, Evans said.

"Then along comes Elon Musk, who decided to form a partnership with, yet independent of, NASA, and we had this tripod," Evans said. SpaceX leases 600 acres there.

The community has embraced SpaceX since it arrived.

"We love having something unique, creative and 'green,'" Evans said, noting the company's commitment to the environment.

Jon Mark Smith, director of the McGregor Chamber of Commerce, speaks about SpaceX workers and their enthusiasm.

"When you see them sitting around at lunch, they're all 21 to 31 years old," Smith said. "They have the education and the ability to soak up the changes of developing technology."

About half of SpaceX's 150 workers at the McGregor installation are natives of the area, many of whom enrolled at Texas State Technical College's Waco campus and took that education and training directly into the aerospace business in McGregor, Smith said.

Now, SpaceX is "heading toward 200" workers in McGregor, Evans said. The other half of the SpaceX workforce is made up of young engineers, "some right out of college," whom SpaceX recruited and brought to McGregor.

This infusion of industry has sparked growth from other businesses, as well. Evans mentions the new Ace Hardware store that recently opened, adding that SpaceX encourages its workers to patronize local businesses. The city's sales tax receipts have increased 18 percent since the company put down roots in Central Texas.

"All of the attention we're getting is because of SpaceX, but we have other industries. By the end of the year, we'll have 6,000 jobs," Smith said.

The city has a population of only 5,000 people, Evans said, but it is situated in an 11-county area that includes the cities of Waco, Killeen, Temple and "lots of tiny communities" with a combined population of about 850,000.


McGregor officials heard 18 months ago that SpaceX was looking at land in Cameron County, Smith said.

"There has been interest in Brownsville for a very long time," he said, and expressed confidence that Brownsville will be selected as the SpaceX launch site.

"I have no doubt in my mind that, if it was left up to SpaceX, they'd go to Brownsville," he said.

"Only something regulatory" -- such as the federal environmental impact study currently under way -- would keep it out of Brownsville, he said. "I don't know that the other options are that much more attractive."

Cape Canaveral, a contender for the launch site, comes with higher transport costs.

"McGregor to Brownsville is so much easier, and (SpaceX) is about cost savings and safety. They want space travel to be less expensive."

McGregor City Manager Evans also is supportive of Brownsville, and confident that it will be chosen.

"We've got the exciting part with the test launches," he said, "but down there, you get the really fun part. We get the tests, but you get the real launches."

In Brownsville, County Commissioner Sofia Benavides recalled her visit in April to SpaceX's corporate headquarters in Hawthorne.

Musk spent 15 minutes with the Brownsville delegation and its presentation for a potential site here. She called Musk and his lieutenants "professional, careful and serious." At the same time, she said, the company's headquarters are laid back.

Her first reaction to SpaceX's plans is that it was development that might affect a fragile ecosystem, she said, but SpaceX staffers have addressed her concerns and apprehensions about the environment.

They explained that the Boca Chica area is similar to both the Cape Canaveral and Vandenburg Air Force Base sites, where SpaceX has tested its rockets.

"They weren't trying to sell us," Benavides said. "They laid out their plans and were very sensitive to our concerns.

"If they can thrive in that environment (in California), and Cape Canaveral, I'll be on board once the environmental impact study is completed," she said.

She already is satisfied that SpaceX can coexist with the environmental issues and recreation uses of Boca Chica.

"It is time now that our people start to have the opportunity to better themselves. If the environmental review comes back favorable, I believe the (anti-development) mindset is different now. Not that we want to jeopardize the birds, but it's time to improve this area as a whole," she said. "Our kids get a future. They go to college and there's nothing for them here. Large companies don't usually look our way."

Border security, too, has been discussed because the launch site is just about 3 miles from the border with Mexico. SpaceX is coordinating with federal agencies and their counterparts in Mexico.

"We could probably end up being the most secure section of the entire border," Benavides said.

Source: (c)2012 Valley Morning Star (Harlingen, Texas). Distributed by MCT Information Services

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