Today we got a little bit of a deeper look into the true “hell” that took (and is taking) place at Tesla in the weeks leading up to the company making its Model 3 push.
A new report from Bloomberg has Elon Musk exclaiming that he is going through “the most excruciatingly hellish several months that [he has] ever had” – along with reporting details on an unreported incident about a worker’s leg (that later had to be amputated) gushing blood from a forklift accident and recounting a story of employees having to trudge through raw sewage on the floor at the Fremont plan.
We’ve heard various news outlets and even the company itself talk about trying to hit its Model 3 production number and having to go through “production hell” for weeks now. We knew that Elon Musk was supposedly sleeping at the Fremont, California factory during this time (“I was wearing the same clothes for five days,” he told Bloomberg) and that countless numbers of revisions have been made to Tesla’s engineering and production processes in order to try and help the company reach its 5,000 car per week goal – which it was able to finally tap for the first time last week.
The question of whether or not the company is going to be able keep producing at this scale and at this rate remains to be seen.
Make no mistake, the hell that Tesla has gone through over the last month or two, as the patience of investors and Wall Street has worn thin, has been well documented.
Bloomberg published a report Thursday morning, looking at Tesla’s walk through production hell in a deeper fashion. Aside from what we already know, the report provides a couple of new details on exactly how hellish the ride has been for employees.
Everybody knows that to reach its goal, Tesla has shifted vastly away from its original plans of how it was going to produce these vehicles. What was supposed to be a brand new, automated and best in industry production line turned into a makeshift tent hastily erected outside of the company’s Fremont plant. Famously, analysts thought the plan was a ridiculous idea:
“Insanity,” said Max Warburton, an analyst with Sanford C. Bernstein & Co., in an email to Bloomberg News. “I don’t think anyone’s seen anything like this outside of the military trying to service vehicles in a war zone.”
As we’ve reported a couple times over the last few days, this hastily erected makeshift solution has not impressed analysts or Wall Street and could be part of the reason the company stock actually fell after it hit its production target.
The Bloomberg article also sheds new light on concerns that have been bubbling up recently about Tesla – safety at its plants, for one. The article details an event where a quality control manager ultimately had to have his leg amputated as a result of a workplace accident. The incident was later blamed on somebody doing donuts on a forklift. As a result, employees had to be sent to counseling because the injury was so gruesome to witness.
On Nov. 18, 2016, eight months before Model 3 production began, a factory employee heard a scream coming from just outside the main building at the Fremont plant. He saw a colleague, quality-control lead Robert Limon, writhing on the blacktop and grabbing at his leg, which was “bleeding like crazy,” the worker says. The specifics of this incident haven’t been previously reported.
Limon’s co-workers gathered around him. Someone used a belt to tie a tourniquet around his leg. The witness, who declined to be named out of concern for adverse consequences from Tesla, says management offered counseling for people who had seen what happened—and the witness took the company up on it, because it was traumatic.
Limon later told this co-worker he’d been hit by a forklift driver who’d been doing doughnuts on the property for fun. Limon didn’t respond to requests for comment for this story, but according to people who saw and spoke to him in the following days, and as depicted in photos seen by Bloomberg Businessweek, the injured leg was amputated.
Tesla says that both Limon and the forklift driver were fooling around in an inappropriate way that isn’t representative of the automaker’s safety culture.
Another previously unreported incident that popped up in Bloomberg’s in-depth article was the fact that workers at Tesla’s Fremont factory had to trudge through raw sewage at one point because of time constraints required to get the Model 3 completed:
Four current employees say the pressure they felt to avoid delays forced them to walk through raw sewage when it spilled onto the floor. Dennis Duran, who works in the paint shop, says that one time when workers balked, he and his peers were told, “Just walk through it. We have to keep the line going.” Tesla says it’s not aware of managers telling employees to walk through sewage and that plumbing issues have been handled promptly.
It also details the “Tesla stare” that some employees wind up painting on their faces after consuming one too many company provided Red Bulls “to battle exhaustion” while working:
To battle exhaustion, employees drink copious amounts of Red Bull, sometimes provided free by Tesla. New employees develop what’s known as the “Tesla stare.” “They come in vibrant, energized,” says Mikey Catura, a Tesla production associate. “And then a couple weeks go by, and you’ll see them walking out of the building just staring out into space like zombies.”
The article, in fairness, also does detail a couple of innovations Tesla has made along the way. The company is credited with engineering a new HVAC system for the Model 3 that allows for ample air circulation without the aesthetics of traditional vehicle e-vents:
Musk declared he didn’t want visible air vents. “I don’t want to see any holes,” von Holzhausen recalls him saying. Von Holzhausen paired engineer Joseph Mardall with designer Peter Blades to figure that one out. Blades’s sketch called for a recessed gap across the entire width of the car from which the air would flow, with a long strip of wood instead of the dash. Mandel pointed out that to make the approach work, the entire ventilation system would need to be redesigned. “Are we serious about this?” he recalls asking.
Musk was serious, but a second problem soon appeared: The wooden strip, just below the air gap, worked like an airplane wing, sucking cold air down and shooting it into the driver’s lap. Mardall, an aerodynamics specialist, proposed adding a second, hidden gap from which air would shoot straight up, lifting the main blast of cold air above the piece of wood and away from the driver’s crotch. “It was one of those eureka moments,” Blades recalls, still in awe of the elegance of the solution. “The spine still tingles.”
The system Blades and Mardall designed combines all the components of a standard HVAC system into a single basketball-size glob of molded plastic tucked under the hood, which Tesla calls the Superbottle. The glob is stamped with a logo of a bottle wearing a superhero cape.
The article also details another in house invention called the Golden Wheel, which is used to break in suspension and align vehicles in an automated fashion at the plant.
Finally, as has been reported on in the past, Tesla also manufactures all of its seats in-house at a separate factory.
Despite the fact that Tesla has hit these immense challenges, Elon Musk’s attention seems to be diverted elsewhere.
In addition to recently working on an impromptu solution to the Thailand cave rescue – and then lashing out at the rescue chief when his solution was not used – Musk has also been at war with the media yet again.
He is also now starting to chime in on the Flint, Michigan water crisis. Don’t get us wrong, all of these problems need solutions and help is a good thing, but is it possible that Elon is forgetting he has a public company to worry about?
Perhaps this is why one of the company’s largest shareholders has reportedly had enough and just wants him to focus on building cars, as we reported yesterday.
After Elon Musk’s efforts to demonstrate his engineering genius in Thailand failed to be appreciated by the world resulting in an odd public spat with the leader of the local rescue team, the Tesla CEO, who suddenly appears eager to find any distractions from focusing on the one thing that matters to Tesla investors, producing cars, has found a new calling: he will take on the contaminated water system in Flint, Michigan.
Responding to a twitter dare that “there’s NO WAY you could help get clean water to Flint, Michigan. Said you wouldn’t be capable idk”, Musk immediately responded:
Please consider this a commitment that I will fund fixing the water in any house in Flint that has water contamination above FDA levels. No kidding.
Musk’s latest hobby, however, could be frowned upon by one of Tesla’s biggest investors, who earlier on Wednesday called for Tesla to “keep its head down and focus on performance”, or as Bloomberg put it, pipe down and execute.
Speaking in a Bloomberg TV interview, James Anderson, a partner and portfolio manager at Baillie Gifford & Co., Tesla’s fourth- largest shareholder, said that “we are very supportive, but we would like peace and execution at this stage”, adding that “it would be good to just concentrate on the core task.”
While Anderson didn’t comment on Musk specifically or elaborate on Tesla’s issues while speaking from Allen & Co.’s Sun Valley conference, Anderson appears to be addressing Musk’s increasingly erratic behavior of late: Musk has made headlines by attacking journalists and Wall Street analysts in recent months as the company has struggled to ramp up production of its Model 3 sedan and stem losses.
According to Bloomberg data, Baillie Gifford owned 12.8 million shares as of the end of March, a stake that’s worth more than $4 billion at current prices. Only Musk, T. Rowe Price and Fidelity owner FMR LLC have a bigger position.
It remains to be seen if the public chiding will lead to any substantial behavioral changes for Musk, who instead of producing cars appears to have spent the bulk of his past two months on Twitter.
Tesla is set to report earnings in the beginning of August, where we will get our latest update as to the current status of “production hell”.
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Author: Tyler Durden