Erik Nordeus - The Engineer

Another option Tesla thought about was to build a new factory in New Mexico. But the then state Governor of California, Arnold Schwarzenegger, opposed the idea. “I wasn’t about to let the company that makes the world’s sexiest and best high-performance electric car go to another state, so we left no stone unturned,” he said. 337

Tesla dreamed about how they one day would build cars in NUMMI. “That would be awesome,” Elon said. “Maybe at some point we have an opportunity to acquire NUMMI, but that isn’t available right now, and we can’t afford it really, unless they give it to us.” 350

One day, the NUMMI plant managers received an unexpected call from the president of Toyota, Akio Toyoda, who gave Elon a secret permission to visit the factory. To prevent media attention from spoiling the deal, Toyoda wanted to keep it quiet, so Elon visited the factory incognito. Hoping no one would recognize him, he wore a hard hat, a blue jacket, and plastic safety goggles, and he acted as inconspicuous as possible. 210

Elon thought the factory would be a perfect match, so Tesla offered what they budgeted for a smaller factory. A month later, Toyota accepted the offer, so Tesla purchased NUMMI in 2010. The price of the factory was $42 million, and $17 million for the machine tools and spare parts. 195To avoid confusion, the factory was renamed to the Tesla Factory.

On the side of the white factory, the word Tesla was painted with large dark letters. A total of 20 percent of the space will be dedicated to Model S, and 40 to 50 percent of all Model S parts are made in-house. In January 2013, the production in NUMMI reached 400 assembled Model S per week, or 20 000 per year. The rest of the factory is currently empty until more models are ready for production. “The great thing about this place is that it sets us up for the next generation after the Model S. We could have 250 000 cars coming out of here in five years,” Elon said. 210,332

The Tesla Factory’s interior is mostly white and gray, including the glossy floor. Because the interior is so large, you have to use bikes to find your way around. The roof features windows so real sunlight can light up the factory. Distinctive from the white interior are the red industrial robots performing various tasks around the factory, including welding different parts together, moving unfinished cars around the factory, and installing the seats. What the robots can’t do, the humans have to do while listening to tunes like Sweet Child O’ Mine by Guns N’ Roses. 51“I think it’s important to have an environment where people look forward to coming to work,” Elon said. “It’s worth putting some effort into making the factory beautiful.” 332

Someone who would be envious of Tesla’s new factory was Steve Jobs. When he wanted to paint his factory white, Jobs got comments like, “You can’t paint a factory pure white. There’s going to be dust and stuff all over.” But Jobs, who had visited the Japanese factories that applied the Toyota Manufacturing System, knew his factory could be clean. “I’d go out to the factory and I’d put on a white glove to check for dust,” Jobs said. “I’d find it everywhere – on machines, on the tops of the racks, on the floor. And I’d ask Debi to get it cleaned. I told her I thought we should be able to eat off the floor of the factory. Well, this drove Debi up the wall. She didn’t understand why. And I couldn’t articulate it back then. See, I’d been very influenced by what I’d seen in Japan. Part of what I greatly admired there – and part of what we were lacking in our factory – was a sense of teamwork and discipline. If we didn’t have the discipline to keep that place spotless, then we weren’t going to have the discipline to keep all these machines running.” 3

Because of Elon’s background in the space industry, he knew a factory could be clean. In the space industry, you have clean rooms where you can’t even have dust particles in the air. “From an environmental standpoint, we want this to be a shiny example of what an automotive plant could be,” Elon said. “You will literally be able to eat from the floor of the factory. It will be the cleanest place you’ve ever seen.” 438

There’s a story about a factory that wasn’t spotless. This factory was filled with so many items that they lost a prototype car stored in the factory. The prototype car remained hidden for weeks. No one knew where it was, until they found it buried between the waste. 2

Elon thought you can only judge a car’s beauty if it’s framed by beautiful surroundings, so the final inspection area in the factory got a wooden floor. 332“Before delivery, the car must go through quality testing,” the VP of manufacturing, Gilbert Passin, said. “Typical quality tests consist of a rolling road [a device that mimics driving on real streets], a water test to check for leaks, and an inspection station that ensures all components are installed to standard. Instead of wasting gallons of water to perform the leak test, we will instead employ ultrasonic waves inside the car as a device on the exterior detects escaping waves.” 249

Both SpaceX and Tesla have the same policy as several companies in the computer industry, but these policies are often not common within the space- or auto industry. Food and snacks are available for free, they can find free M&M, Beef Jerky, and Starbursts. They are, however, not encouraged to feed the snacks to their pets they are allowed to bring with them. If they need a break, they can visit the arcade room with pinball machines. “You keep your engineers happy and they work a little longer and harder,” Elon said. “It’s counter-intuitive, but it works.” 4

Tesla applied the ideas behind Lean by minimizing the number of parts stored in the factory. But one day the assembly line stopped. A container from China was stuck in customs, so they didn’t get the supply of a $3 USB cable needed for each car. It’s common to have a reserve plan if something like this happens, and it consisted of flying in the cables from China. But it failed because Tesla’s credit limit was exceeded. To solve the problem, Tesla had to send employees to stores around the factory to hunt USB cables. 353Another shipment of trunk carpets from a supplier in Mexico was delayed because of a drug shootout close to the border. Until the shipment arrived, Tesla had to store unfinished Model S on the parking lot. 392This is the drawback when your factory is Lean. You may save money if you minimize the inventory, but you may lose money if you can’t fly in any parts because a volcano on Iceland disrupts the air traffic. “It’s unbelievable how painful it is when you are missing one thing and the whole machine grinds to a halt,” JB Straubel said. 426

Another idea Tesla got from Toyota was to combine engineering and production by having both types of engineers close to each other. The Toyota Production System calls this genchi genbutsu , which can be translated to “going to the place to see the actual situation for understanding.” 2“When you try to make something there’s a big leap between making that first prototype and actually making it, manufacturing it in large quantity with good quality,” Elon said. “And for some reason people decide, ‘oh, they’re gonna do the engineering here and do the manufacturing on the other side of the world.’ And I think that actually ends up being inefficient. I like that combination of engineering and manufacturing.” 354The design engineers responsible for the construction of the product need to visit the factory to see the mistakes they’ve made, and the production engineers can suggest improvements to the design engineers. This process is more efficient if both the factory and the research & development office are close together. 361