Elon Musk believes deeply in vertical integration. Maybe that marks him as a control freak or maybe it just means he is a smart businessman. Over the past year, Tesla has added Riviera Tool & Die to its list of corporate acquisitions and changed its name to Tesla Michigan. That brought control over many aspects of the manufacturing process in-house. While other companies rely on “just in time” relationships with suppliers, Tesla wants to exert greater control over the quality and scheduling of its supply chain.
In the middle of this year, Tesla severed its long-standing relationship with Mobileye and brought the design and engineering associated with its autonomous driving technology in-house. Doing so enabled the company to revise its hardware package to support fully autonomous driving. Every car built since October 19 now has the capability to be fully self driving in the future, once the software is perfected and the necessary regulatory approvals are obtained.
Just a few days ago, during the reveal of the new Tesla Solar Roof, Elon Musk casually mentioned there is now another new division within the company known as Tesla Glass that will create innovative new uses for and ways to manufacture glass. The glass solar tiles were the first fruits of that move, but then the company announced an all-glass roof for the Model S that gives the car a more open, airy feel but is strong enough to allow the center roof support to be removed.
Today, Tesla announced that it has acquired Grohmann Engineering, one of Germany’s top engineering firms specializing in automated assembly techniques, which is located in Prüm near the border with Belgium and Luxembourg. Elon Musk said recently that he intends to reinvent the factory itself. He believes the manufacturing process can be accelerated by a factor of 10. That sort of production speed will be needed if Tesla is to start building as many as 500,000 cars a year by 2018. The expertise of Grohmann Engineering is expected to go a long way toward achieving that goal.
In a blog post today, Tesla said:
“Led by founder and CEO Klaus Grohmann, Grohmann Engineering is one of the world leaders in highly automated methods of manufacturing. This transaction will bring Mr. Grohmann’s leadership, a world-class team and unique expertise in-house. Moreover, it will serve as the initial base for Tesla Advanced Automation Germany headquarters, with other locations to follow. We expect to add over 1,000 advanced engineering and skilled technician jobs in Germany over the next two years.
“Under the continued leadership of Mr. Grohmann, several critical elements of Tesla’s automated manufacturing systems will be designed and produced in Prüm to help make our factories the most advanced in the world. Combined with our California and Michigan engineering facilities, as well as other locations to follow, we believe the result will yield exponential improvements in the speed and quality of production, while substantially reducing the capital expenditures required per vehicle.”
Musk waxes eloquent about “the machine that builds the machine.” With input from the new Tesla Grohmann, he may just disrupt the way automobiles get made along with all the other disruptions he is involved in. Purchasing a top German engineering firm also sends a direct message to every carmaker in Germany: “Watch out. We’re coming for you sooner than you ever thought possible.”