American companies saved labor costs, but they lost the daily feel for ways to improve their products

Monday, May 13th, 2024

Elon Musk by Walter IsaacsonBetween 2000 and 2010, Walter Isaacson explains (in his biography of Elon), the U.S. lost one-third of its manufacturing jobs:

By sending their factories abroad, American companies saved labor costs, but they lost the daily feel for ways to improve their products.

Musk bucked this trend, largely because he wanted to have tight control of the manufacturing process. He believed that designing the factory to build a car — “the machine that builds the machine” — was as important as designing the car itself. Tesla’s design-manufacturing feedback loop gave it a competitive advantage, allowing it to innovate on a daily basis.

Oracle founder Larry Ellison joined only two corporate boards, Apple and Tesla, and he became close friends with Jobs and Musk. He said they both had beneficial cases of obsessive-compulsive disorder. “OCD is one of the reasons for their success, because they obsessed on solving a problem until they did,” he says. What set them apart is that Musk, unlike Jobs, applied that obsession not just to the design of a product but also to the underlying science, engineering, and manufacturing. “Steve just had to get the conception and software right, but the manufacturing was outsourced,” Ellison says. “Elon took on the manufacturing, the materials, the huge factories.” Jobs loved to walk through Apple’s design studio on a daily basis, but he never visited his factories in China. Musk, in contrast, spent more time walking assembly lines than he did walking around the design studio. “The brain strain of designing the car is tiny compared to the brain strain of designing the factory,” he says.

[…]

He was able to get the mothballed factory, which at one point had been worth $1 billion, for $42 million. In addition, Toyota agreed to invest $50 million in Tesla.

When redesigning the factory, Musk put the cubicles for the engineers right on the edge of the assembly lines, so they would see the flashing lights and hear the complaints whenever one of their design elements caused a slowdown.

[…]

The month after Tesla bought the factory, Musk was able to take the company public, the first IPO by an American carmaker since Ford’s in 1956.

[…]

By the end of the day, the stock market had fallen, but Tesla’s stock rose more than 40 percent, providing $266 million in financing for the company.

Comments

  1. M. Mack says:

    Elon sounds pretty “Old School,” like Henry Ford and his right hand man “Cast Iron” Charlie Sorensen. Between them, they defined the auto industry, with the moving assembly line, one worker doing one task, and setting up the River Rouge plant to be vertically integrated, from the iron ore being turned into steel and iron in blast furnaces on site all the way to the cars rolling off the end of the line, and close to every step in between.

  2. Gaikokumaniakku says:

    “Musk, in contrast, spent more time walking assembly lines than he did walking around the design studio. ‘The brain strain of designing the car is tiny compared to the brain strain of designing the factory,’ he says.”

    I have heard rumors that Tesla cars cannot survive car washes or mud puddles unless they are first put into “car wash mode.” If such rumors are true, maybe the factory is well-designed but the car is badly designed.

  3. Gaikokumaniakku says:

    Also, the cars may or may not be well-designed but the charging stations apparently were designed to be convenient for copper thieves.

  4. Pseudo-Chrysostom says:

    Are ‘copper thieves’ an abstract energy field that randomly afflicts some areas and not others?

    Or, are they perhaps instead aristoi, with leave to go about their business without molestation from their social inferiors?

    You can’t stop the Titanic from sinking by shuffling the deck chairs into new arrangements. A copper theft problem is not solved by turning everything into a wildlife enclosure; it is solved by catching the wildlife and hanging them in the public square.

  5. Jim says:

    As a rule, The System fucks those who agree to its tenets and leaves those who haven’t bought in unmolested.

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