Between 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.
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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.
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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.
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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.