Editor’s note: This article below was written before the last Tesla conference call for investors. CEO Elon Musk expounded on the challenges of over-automation and he and CFO touched on the point that reducing automation would actually increase their gross margins … even while the shareholder letter published right before the call reaffirmed that automation was still a pillar in Tesla’s plan to build high-volume, low-cost electric cars for the masses. Take it all for what you will, and check out the interesting piece below for more internal and external commentary on this topic.
Tesla’s robots seem to have evolved from super-powered X-Men, here to save the world, into pitchfork-wielding devils tormenting the lost souls condemned to Production Hell. As Elon Musk admits, that “excessive automation at Tesla was a mistake.” There are plenty of auto industry veterans ready to say “I told you so.”
Timothy B. Lee writes in Ars Technica that it’s not easy to improve on the manufacturing methods of conventional automakers. While automation plays an important role on the assembly line, it’s not the answer to every production problem. As Tesla struggles to find the most efficient mix of human and machine, it may be repeating some of the industry’s past errors.
Jeffrey Liker, author of The Toyota Way, recently told the story of how Toyota got burned in the late 1970s by investing too much in automation too quickly. Other automakers have had similar experiences.
“A lot of the mistakes we’re hearing about [at Tesla] are mistakes that were made in the rest of the industry in the 1980s and the 1990s,” Navigant Research Analyst Sam Abuelsamid told Lee. He recalls the experience of GM, which lost billions in a binge of automation in the 1980s.
In the 1980s, GM CEO Roger Smith had a vision of a “lights out” car factory where robots would go about their business unmolested by pesky humans. However, things didn’t work out well, as Paul Ingrassia and Joseph White relate in their 1994 book Comeback:
“As Hamtramck’s assembly line tried to gain speed, the computer-guided dolly wandered off course. The spray-painting robots began spraying each other instead of the cars, causing GM to truck the cars across town to a fifty-seven-year-old Cadillac plant for repainting. When a massive computer-controlled ‘robogate’ welding machine smashed a car body, or a welding machine stopped dead, the entire Hamtramck line would stop. Workers could do nothing but stand around and wait while managers called in the robot contractor’s technicians.”
GM spent billions on robots, but it never saw a return on that investment. “Instead of easing robots onto the line a few at a time, providing for inevitable debugging problems with redundant equipment, GM bet the entire Hamtramck production system on the proposition that leading-edge automation would work instantaneously,” wrote Ingrassia and White.
Above: Musk has expressed concerns that Tesla has relied too heavily on automation on the Tesla Model 3 production line (YouTube: Wochit Tech)
Mr. Lee notes that, although today’s robots are more sophisticated, the same basic principle applies. “Automation works best when it’s added incrementally to a production process that’s already working smoothly. Musk seems to have made the same mistake Smith did: bringing in way too many robots, way too quickly, leaving little time for testing and refining the process.”
Automotive consultant Sandy Munro also touched on Tesla’s automation aggravation in a lengthy discussion of his company’s teardown of a Model 3. He believes Tesla has hurt itself by ignoring conventional industry wisdom about manufacturing processes, but notes that there’s no shortage of experts out there who could help the company get back on track. It wouldn’t be unprecedented for Tesla to seek outside help — it brought in the engineering consulting firm Ricardo in 2007 when it was having trouble with the Roadster transmission, and in 2009 it partnered with Daimler, which helped with the development of Model S.