Tesla Motors Announces Senior Engineering and Manufacturing Executives

Link (http://www.teslamotors.com/media/press_room.php?id=1907)

A huge loan from the fed allows you to buy the best talent from around the world.

Tesla Motors Announces Senior Engineering and Manufacturing Executives

Link (http://www.teslamotors.com/media/press_room.php?id=1907)

A huge loan from the fed allows you to buy the best talent from around the world.

I wouldn't call these guys the best talent, more like available talent. After reading the Tesla link above, I am still dumbfounded by their insistence of setting up production of their cars in California. California is the least manufacturing friendly state in the union with some of the highest labor rates and regulations. Are they trying to fail?? Even Silicone Valley, where these guys supposedly get their smarts from, long, long since abandoned actually manufacturing anything in California. I can't think of one good reason to make their cars in California other than the CEO doesn't have to travel far from his home to get to the factory.

I can't think of one good reason to make their cars in California other than the CEO doesn't have to travel far from his home to get to the factory.

Well, when most of the people who can afford your product are Hollywood movie stars, there you go.

Well, when most of the people who can afford your product are Hollywood movie stars, there you go.

Your largest market is California, so that's where you go, especially when Arnold cuts you a great deal.

I think there is going to be a major adjustment in wages over the next few years as our country struggles to deal with double digit unemployment. That's the only way I can think of our country being able to absorb the 6 million people who are desperately looking for jobs and who's unemployment paychecks are rapidly coming to an end.

California was hit harder than anyone. I am sure that once Tesla gets to high volume, they will probably outsource to some uber Republican state such as Tennessee, but why not make over an already built, local factory for low volume production of the Model S? Especially when California's desire for ZEVs is at obsession levels that they'll offer any tax rebate and even subsidies to get them? Maybe shipping to California of all of the materials is faster and cheaper than a midwestern state?

I agree though, it doesn't really make any sense. I just try to be devil's advocate, but I don't have much of an explanation for it.

It doesn't make sense until you think about the following:


1) No labor unions
2) California gave them excellent incentives
3) High levels of automation
4) Huge California market
5) New product and technology - Car 2.0


First you should consider that these people are not idiots. Then, you can try to figure out the reasons why they would make such a "rediculious and stupid" decision.

Manufacturing is going to go where the market is to the point where it makes good sense. I think California would love to be the next Detroit for Car 2.0. It's going to be cleaner, meaner, automated with massive levels of value added.

Plus, after they get everything working perfectly they can then just duplicate the factories around the world. Having a factory near headquarters is a great advantage, especially for a new and untested product and technology.

Sounds like California Dreaming 2.0

Shipping thousands of cars across the country or across the ocean is a lot more expensive than shipping hard drives and motherboards methinks. Ergo, if their main market is in California, it's probably just as well to make them in California. Besides, since most of the expense of producing the vehicle are parts which are outsourced anyway, (not least of which are the $30,000 batteries, and all of the other electronics like the 17" screen in the center console). Then assembly is mostly automated and maybe just a few non union guys doing a couple of things, California's as good as anywhere else I guess.

1) Do you all think that California is the only place cars of high value are sold?

2) Have you not heard of super cheap shipping costs to and from places as near as Arizona or Nevada or even the mid west?

3) Having your headquarters in California is all that matters. Apple has it's headquarters here but makes everything in China. Yet they still print on every box "designed in California" or something like that and it works for them.

4) Sure, some parts of California got hit hard in this recent crisis, but the cost of living here has not changed one iota. No environmental regulations have changed and there are more on the way. Labor rates remain high and by and large, California remains as it was.

5) The transportation costs you save on by locating in California to serve that market are wiped out by the cost to send cars to Florida, Chicago, New York, Austin, etc.

1) Do you all think that California is the only place cars of high value are sold?

Who said that?


2) Have you not heard of super cheap shipping costs to and from places as near as Arizona or Nevada or even the mid west?

Does that include the price of all the engineers and managers going back and forth to their California headquarters? Ask them to move to Arizona? Good luck.


3) Having your headquarters in California is all that matters. Apple has it's headquarters here but makes everything in China. Yet they still print on every box "designed in California" or something like that and it works for them.

Big difference between manufacturing an iPhone and an Car 2.0.


4) Sure, some parts of California got hit hard in this recent crisis, but the cost of living here has not changed one iota. No environmental regulations have changed and there are more on the way. Labor rates remain high and by and large, California remains as it was.

Perhaps men of greater vision have a different idea of California. Silicon Valley is highly respected in the world and has given humanity great wealth. I'm going to go with Tesla's vision rather than your limited view on things.



5) The transportation costs you save on by locating in California to serve that market are wiped out by the cost to send cars to Florida, Chicago, New York, Austin, etc.


Do you have any idea how many giant factories GM has (had)? Just because they are building one factory in California to develop Car 2.0 and serve the huge California market does not mean they can't have factories all over the world. It's common, what are you thinking?

I feel Car 2.0 needs more than just cheap labor costs to be successful. Why? Because this new technology has just begun. It's got a lot to do with integration, marketing, design, functionality, efficiency, sustainability, vision, invention, etc. than a technology that has been in development for a 100 years.

Again, There are no unions, and high automation. In that situation, you need less grunt and more brain. That brain is the most valuable resource and you have to pay for that no matter who or where you are.

Well, when most of the people who can afford your product are Hollywood movie stars, there you go.

Then why not plan your factory somewhere cheap and close to Hollywood, like Lancaster, or Riverside, or Santa Clarita? No, they want to put it in San Jose, in the Bay Area, not cheap, union sympathetic and the birthplace of the NIMBY. This means that will have to be moved by train down to Hollywood and so not that different than if they were put on a train from Indiana. I guess all the big CEOs in Silicon Valley will be able to pick their cars up at the factory, but all the rich financiers, bankers, advertising executives and broadcast executives in New York will have to wait until they build a factory next to them?

Seems to me that if you only have enough money to build one factory, you should put it in a union free state, with a more relaxed environmental attitude that is friendly to manufacturing, has a cheap labor pool that is ready to work, is located near or at a transportation hub for the country and where the various government agencies are willing to give you great big incentives to help you get started. Tesla seems to want to do the opposite of this. I really think it comes down to the arrogance of the companies leadership. They want to be able to micromanage the factory and still be able to zip home in their roadster for dinner with the kids.

In the end, they can do it their way. Their labor costs will be very high, their transportation cost will be higher, their environmental compliance will be tedious and expensive, their energy costs will be high and there's even a good chance that the UAW will migrate from Fremont to San Jose. What this means is a higher sticker price for the car, which I guess is OK for luxury cars, but this means that they either are missing out on potential additional profit or the opportunity to sell to a wider market. I really don't see the up side to building their plant in California, but that's just my opinion and it's really not my problem. So have at it, those out of work NUMMI workers could use a break.

Time will tell whether the advantage of manufacturing close to your market will work in this case.

Reality is that all automakers will soon face international competition as we've never before seen. France is back through Renault / Nissan. Italy's back through Fiat's acquisition of Chrysler. Korea is now on par with Japan. China and India are on the verge of exporting vehicles worldwide, including North America.

In short, every single miss-step any automaker makes may lead to bankruptcy within months, so expect the end of many common brands (Saturn, etc.) and more consolidation. New companies like Tesla Motors and Fisher Automotive will be acquired or disappear as their products are copied by desperate competitors.