The City of Downey Says Tesla Motors Goes for the Cash, Moves Jobs to Vacant Toyota Plant

After Months of "Good Faith" Negotiating, Region Loses Out to Toyota

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| Source: City of Downey

DOWNEY, Calif., May 20, 2010 (GLOBE NEWSWIRE) -- Although the Downey City Council had planned to approve a Lease Amendment with IRG today to bring Tesla Motors to the City of Downey, the City Council instead will hold a meeting to inform the region that despite months of good faith negotiating, and doing everything within their power to bring the manufacturer to Downey, the jobs promised by Tesla will instead go to a facility in northern California.

Early this afternoon, Councilman Mario Guerra received media calls, and later confirmed through a call by the City to Tesla's CEO Elon Musk, that the 1,200 jobs promised to Downey will be locating to northern California. "Today the Southeast Los Angeles County region was betrayed by Tesla," said Councilmember Mario Guerra. "Mr. Musk gave me his word that Tesla would be coming to Downey. Today the residents of Downey are learning the same lesson several other cities have learned when dealing with Tesla and Mr. Musk: They cannot be trusted to honor their word. The fact is that Tesla has been extremely disingenuous in their dealing with Downey and I now have new appreciation as to why America is fed up with many large corporations. .This last minute betrayal is even more shocking because the City of Downey was hours away from signing a the lease with Tesla that would have been an economic boon for the City."

Mayor Pro Tem Luis Marquez when told of the news commented, "It is shocking the amount of time and effort that has been needlessly wasted by Downey due to Tesla misleading the City; their actions are unconscionable." Tesla went so far as to submit planning applications requesting the city approve a subdivision of the property and determine if the proposed assembly plant is in compliance with the Downey Landing Specific Plan. "The question must now be asked if Tesla plans to reimburse all the costs associated with their underhanded negotiation tactics," Marquez concluded.

Mayor Anne Bayer commented, "I was very disappointed and stunned to learn the news that Tesla had decided against locating in Downey especially after the City and Tesla officials had just jointly testified at an appropriations' committee hearing in Sacramento on Tuesday." The City has been working hard to get the necessary financing in place to make the deal a reality."

Councilmember Dave Gafin agreed, "Like my fellow Councilmembers I was speechless for a moment, then I became appalled by what transpired today. Downey negotiated in good faith and with due diligence with countless hours being devoted by our staff. To have been strung along and possibly used by E. Musk is unconscionable. As we all know, Tesla has a track record of doing this with other deals in California and New Mexico."

Councilmember Roger Brossmer concluded by saying, "While the City of Downey and our region was dealt a serious blow today, I know our city staff, county officials, and state elected officials did everything in our power to get this deal done. Although these efforts could not compete with a 50 million dollar deal to buy the jobs for northern California, I am confident this site is well suited for other high tech companies and Downey stands willing to start the process all over again."

City of Downey
Scott Pomrehn, Public Information Officer
562 904 7286
Fax: 562 923 6388

11111 Brookshire Avenue
Downey, CA 90241