It's a good read and I enjoy his writing style. I did chuckle at a few of his thoughts though and hope that they were intended to be as tongue-in-cheek as I took them to be:
> As we walk through the factory, our small group is permanently trailed by two firemen, with a big first aid kit in hand. Nothing happens.
I was impressed with the summary points regarding modern automotive production practices in the article. Allegedly, the value in robots and automation is the speed of retooling, not the overall line speed which one would naively assume. Also, smart automakers assemble to order. We are truly a far cry from Henry Ford and his Model T! This all bodes well for our personalized robotic food production network at http://infinite-food.com/ :)
The biggest reason to switch to robots in manufacturing is quality control, followed by retooling speed, followed (distantly) by line speed. If you have any humans in your process, you only go as fast as they can.
As some who works in manufacturing, the more your volume goes up, the more you value repeatability. One error in a hundred isn't an issue when you manufacture ten, but when you manufacture a million it is a huge headache.
While they are decidedly bearish on Tesla, dailykanban's analysis is worth reading. They know one thing (auto manufacturing) and they know it really well. Their comments on just how mismatched Tesla's public statements and private actions are is damning...even if it sometimes feels a bit like potshots.
I'm not making comments about the validity of the article, but I do want to point out that a quick google search of the author seems to imply that he is pretty much universally disliked.
So dozens of plant workers all have more or less the same told experience about the human indignities of labor in Tesla facilities but the untruth goes "either way"? That doesn't seem honest of you.
I wasn't trying to say that the article itself was true or untrue - just that if people were upset about the reporting, that doesn't say anything about the accuracy of the article one way or the other.
if it is the 2010 article it was a bit ridiculous by bringing up every anti bailout reference possible to take away from a vehicle and comparing it to other cars when it was really a first of its kind; an EV with a REX.
I own a 2nd generation Volt and love it, never really cared for the styling or interior of the first generation but mostly because the range of the first attempt fell short of my needs. My current Volt solves both my problems, I have the ability to go all electric on my commute of 54 miles round trip if not 10 more in summer. I can go any long distance trip I want and not worry about being stranded or having to wait an hour or more for a recharge even 200 less miles.
Wow, I remember this article at the time.. But what a profoundly even more misinformed article in retrospect. Looking at the Gen 2 Volt, the total sales numbers for both generations, the quality of the car, the fact that it put GM ahead in terms of many others R&D on battery vehicles... What a foolish article.
Given Volt has a decent battery, I would bet an average volt will have a life time around 300K. Its has its shortcoming in terms passenger space and styling, but its a work horse!
The authors (specifically, Ronnie Schreiber) that worked under Bertel also wrote multiple, glowing articles showering praise on Elio motors and basically secured them many of their preorders...
It is very potshotish. Comparing production hell to a 75% increase in stock isn't really a fluid argument. They should stick to the manufacturing bits. Otherwise, enjoyed the read.
Both Bertel & Ed were writers/editors at The Truth About Cars. TTAC is a fabulous website if you're interested in the auto industry, but their perspective and target demo is mainly the automotive sales industry. Dealers and the supporting network around them.
Their anti-Tesla bias is strong and well-documented. They've had legitimate criticisms but take what they say with a grain of salt.
Might be more properly titled "Why this factory in China is 10x better than Tesla's" Factory. As folks have noted, not entirely off base, but not at all an article about the Volvo factory.
Serious question, I read about all these amazing factory line marvels and how much faster it is to create these state of the art factories in China. But I never understood what is giving China such a huge competitive advantage? Why does it take that much longer in Europe and the USA? Sure, we can dive into some of the political rhetoric, but from an engineering prospective, what is the root cause? Is there a price to making these factory faster (such as government subsidy)?
I speculate that not-in-my-backyard-ism is much less of an issue in China, because people living nearby do not get as much of a say in whether to allow it.
And I would speculate that issue is true throughout the whole system. With strong private property laws, fairly transparent government accountable in elections, employees with voices, and lawyers ready to do battle for any side of an issue, then there are many more considerations needed for any large project.
That said, there's a whole bunch of other good explanations in this thread. Very informative.
Not true anymore. You need to submit written environmental protection plans straight up just to register a venture these days, let alone obtain the requisite licenses to operate, and corporate board members are held personally liable. It has reached the point where the default legal advice is "stay off boards in mainland China".
Chinese government decide to cut down use of coals, and they dare to forcefully shutdown may smaller cities coal heating systems to meet the goal of using natural gas, and they force the citizens to shoulder the bill.
To say it does not care about environment is just plain ignorant. Anything is planned top down. They care anything and everything, as long as there is actual value or risk.
It’s ok. I definitely believe the situation can’t stay the same, and eventually talk and periodic but temporary crackdowns will have to instead become sustained action.
Maybe that is happening now (I still reserve judgement). I get what they did rural coal heating (but I’m sure there are plenty of cold villagers who didn’t get enough subsidies to use gas or electricity). It is definitely helps the air this season, though the real test will be January and February, which were actually regressions in 2017 vs. 2016.
They do touch on it in the article. Permits/regulations added to NIMBYs and pre-existing ageing infrastructure conspire to slow things down.
Not to mention political point scoring over large job creation projects. With the rise of robot workers factories such as these might find themselves unwelcome in previously accommodating areas where their size, logistic needs and impact on the surrounding infrastructure were previously offset by job creation.
So at this sort of scale it's as much a question of logistics and impact to the surrounding area as it is one of pure engineering.
Everything you said it's obviously true. I think that's what made China attractive in the first place. Now though there also are massive Dubey effects. You want to be close to your supplies and those are in China and as I hear often just down the road. That's what we have lost and what's really hard to get back.
It's also that the mindshare of the elite in America was in software and computers until very, very recently where it's branched out to green energy, rockets, and next gen automotives. And we have Musk to thank for at least two out of the three of those.
I also think the natural independent streak running through America (and Canada / Israel / UK / AUS to a lesser extent) draws more of us to software because you don't need to reach consensus to get things done.
One thing is momentum. In the US (and Europe) we have established factories, practices, and systems. It's hard to change those, developing countries (which from an industrial perspective much of China still is) have an advantage in that they're getting to try out the latest concepts and have no reason not to. See Japan and Europe post WWII. Both regions were devastated by war, but had the economic ability (or support) to rebuild their industries. As a result they ended up decades ahead of the US in industrial capacity and/or quality, because the US through the 1970s (and later but that's when we started wising up) was stuck with pre-WWII industrial methods and models. Propped up by large bank accounts, easy loans, and large inventory (which hides process deficiencies like bottlenecks and rework). Once pressure was put on the US auto industry (1970s, by the Japanese and the oil crisis) they started changing or failing. They had no reason to adapt until then, and even with the clear demonstration of how to work better it still took many of them decades to figure it out.
You can see similar trends with respect to telecom infrastructure adoption in developing nations versus developed nations.
Another advantage China has is population. When you have well over a billion people, you can afford to throw them at the problem and try out numerous things. Failure becomes an option because they have both the people to try it, and the space to try it in.
Their government also has a willingness (unlike in the US, and not as common in Europe anymore) to step in and subsidize costs to encourage moving in a certain direction in order to grow their national economy. The US, in particular, doesn't do this or does it haphazardly due to the frequent changes in political leadership (we could never create and stick with a 10 year plan, for instance).
Yup, I think the real measure of the cultural industrial repeatability comes at generational transitions in people and in tech. What happens in those nations when the next gen leadership and/or tech needs development and installation in the face of existing leadership/tech. I think you see that a little in Japan where there are some company breakdowns today because the leadership who did great in their new growth phase have basically stagnated in their thinking.
I also suspect China, as a whole, is willing and able to move mountains (perhaps literally?) to win factories. Entire cities exist just to build "widgets" for the rest of the world.
I remember a similar article/editorial that made similar points about electronics production. China has both the engineering professionals and the factory line staff on-hand to spin up massive efforts in short time. The US simply doesn't have that many people in any one place like China does.
They also don't really care too much about the environment or human rights or property rights. Whatever the government wants done that's beneficial for business in China will generally happen, for better or for worse.
Flexibility of local governments and generally a 'growth before everythign else' mindset. Add to it an ENORMOUS workforce that is generally decently/well educated and socialized to accept a work culture that wouldn't work other places.
Add to that snowball effects...everything else is there. Everyone else is building there....it is physically closer to things, but land is still (relatively) cheap.
Compare the permitting process/cost + available land + available workforce + general cost of doing business + general government mindset + a well established supply chain to distribute products outward + a poorly tapped market for cars locally (local versions are truly terrible) + lack of political uncertainty in China as compared to Japan. Japan, Indonesia, the US, Ghana, etc. might better on a few of those metrics but the overall model makes China a minimum in terms of risk.
You add to that that as companies increasingly globalize they are developing significant competencies to build factories and do business in places further afield. First this was partnered outsourcing, because it bought a partnership that knows the local affordances and externalities. Now that they have the competency, they can do it anywhere because they have learned to do it anywhere[0] and look to run the minimization routine. Toyota is actually shrinking the size of plants so they can be more agile not just in models and output but in plant location...right now the math says china, later it might say Africa.
Industry is massive and geographically nearby in China. If you need to source a different size bolt at scale, the factory for them may be 10-15 minute drive down the road. In the US, you may have to have them overnighted. The amount of raw resources quickly available is a huge competitive advantage in being able to pivot on manufacturing changes and keep lead times down
Yeah, this is the real reason. The pearl river delta has the densest industrial ecosystem in the world.
This is was a result of China's mercantilist trade policy - e.g. suppressing the value of the yuan/subsidizing industry
-> manufacturing moves to China
-> ecosystem gets richer
-> manufacturing becomes more valuable in China
-> more manufacturing moves there.
etc.
It took 20-30 years to get the ball rolling before network effects took over, but now if you want a specific kind of LED or a different size bolt at scale the chances are the pearl river delta will be the easiest place to source it and if that's what you want to build, it's the best place in the world to sell it.
The economic risk this presents to the rest of the world is severely underestimated. Industrial ecosystems take decades to grow and decades to decline, but access can be cut off overnight.
I have a suspicion - although no real evidence - that this is a management and class system effect. I've often asked myself why, in the UK, we have either small boutique car firms (e.g. TVR, various F1 teams) OR factories under foreign ownership running imported management processes, but all the big domestic car firms melted away. Some clues are in the final demise of MG Rover: https://www.theguardian.com/business/2011/may/08/mg-rover-di...
That's an extreme example of the problem, but I think it's endemic in the UK being so centered around the financial industry. While the middle class is centered around the cottage industry of rising property prices. The most ambitious people go into finance, not businesses where you actually have to make something or deal with employees. The factory, employees and culture surrounding that then just become tradeable tokens that will have their surplus value extracted and then discarded. Meanwhile it's hard to get ambitious, effective managers because people with that skill set are earning a lot more elsewhere in the economy.
A lot of what makes a good manufacturing process is, effectively, oral culture - passed on through apprenticeships and shadowing skilled technicians. Attempts to document it are surprisingly hard (this is why ISO9001 et al are unpopular). So in order to get a good factory startup you have to get experienced staff, which is easier in a cultural location that already has them.
I think you really nailed it. In mature economies it's no longer about creating anything but about extracting and concentrating value through financial instruments. That is so much easier. Real invention, design, and production are incredibly hard compared to just finding some angle to extract interest or profit from asset appreciation.
That is also what will ultimately bring us down. I have a suspicion that a more general formulation of this effect is a major cause of why civilizations collapse.
The reality is that most western transportation firms have been more interested in selling debt than vehicles for the last 20 years. The vehicle production is almost a necessary evil to get to the leasing and hire purchase gold.
Humans have excelled at producing more than they need for centuries. Route everyone's outputs through yourself, and then dole out the necessities only. Now you're wealthy.
Edit: I guess what I'm saying is; things will stratify. Someone will always be "paying the rent".
The whole economy isn't built on rent seeking behavior, but rent seekers are largely in charge and are molding it to better fit their interests, even though it already serves their interests very well. Trump (a property developer) is a fairly good example of this.
As with all parasitic systems, sometimes the host is killed and sometimes the host fights back.
Right now the host doesn't appear to be fighting back very effectively.
There's a lot to hate about Trump, but I'm confused by that example. Property development is building, in perhaps the most literal sense. Trump Towers are actual things that provide tangible value. I don't know if their valuations are sane or if the processes used were ethical, it that what you were aiming at?
Property development conflates building construction which does provide tangible value with land value rent extraction and speculation, which does not.
The latter is largely how Trump managed to grow his wealth; he's pretty bad at the former.
While a lot of what you say is true, I think a big factor which isn't overlooked but under accounted for is the worker wage/culture situation. Employee relations get much easier when employees don't have much else choice.
As a counter point, it felt like the engineering talent is still from European countries - note that the plant manager is European, and the machinery they use in the factory is again by a European company. So the upper management that you say moved to finance is still in the industry.
Another reason I think is what some sibling comments of yours have pointed out - lax rules and willingness to co-operate with tech advancement (at the risk of environmental degradation)
Robert Peston's latest book "WTF" mentions that the distribution of management capability in UK companies is strongly bimodal - we either have great management or awful management.
A lot of what makes a good manufacturing process is, effectively, oral culture - passed on through apprenticeships and shadowing skilled technicians. Attempts to document it are surprisingly hard (this is why ISO9001 et al are unpopular). So in order to get a good factory startup you have to get experienced staff, which is easier in a cultural location that already has them.
Read Thomas Sowell's Culture and Migrations for more on this and the historical evidence.
Is this the right one? I doubt he would have written two books with the same title transposed... But hey I've seen lots of silly things in my life, so I thought I would double check.
Combination of currency manipulation, minimal ip enforcement, and lack of regulations and worker rights led American companies to start building factories in China, until they hit a critical mass.
Short answer: Foxconn. And it's a Taiwanese company.
The difference in resources and capacity are so vast, businesses like Apple have depended on these differences to make their huge profits.
Steve Jobs has advocated US jobs and US factories and has said he would do everything he could, but the truth is, even Apple is/was too dependent on Foxconn, and there would be no Apple as we know it otherwise.
1. '"You can't find that many in America to hire," Jobs told the president, according to his biographer, Walter Isaacson. "If you could educate these engineers, we could move more manufacturing plants here."' [1]
2. When Apple needed to change the glass on their iPhones last minute, Foxconn obliged. The flexibility, speed, and sheer scale of their assembly operations are unmatched. [2]
3. Foxconn leverages Chinese work ethics and culture to its maximum. The world marveled at 2008 drummers in perfect sync at the Chinese Olympic opening of 2008 [3]. Now just imagine them building phones.
It also doesn't help that costs are lower.
So Apple wouldn't exist without Foxconn, and Foxconn wouldn't exist without China.
Now Foxconn is outgrowing China, and is building factories elsewhere. But Foxconn city isn't going anywhere anytime soon, and arguable, whatever they do elsewhere will never match what they've build in China, nor will they ever cease to be dependent on its output.
When Apple fails, you know the scale of the problem.
I think they're just so big and have so much money now, it's only natural for them to expand everywhere they can.
In the US they will build factories and do the best they can with a US based factory. And same with everywhere else. Each location will give rise to various cost and performance attributes, but at the end of the day, they will:
1. Compete regionally with factories that share those exact same constraints.
and
2. Be Foxconn. All their factories belong to them, giving them unparalleled leverage and output capacity than the mere sum of their parts.
US companies will flock to Foxconn's "US" factory. It will be in quotes because nothing will stop them from doing absolutely everything beyond what will qualify as Made in USA elsewhere to minimize costs and maximize performance, as do US companies do already. But no one is Foxconn.
China has lots of factories, are always building them, and have a lot of expertise around the practice.
Expertise means that the architects and construction guys have done it before. The regulators get it.
When I was in the business of building out and managing on-premise data centers, our team could get a project off the ground in a few days. We knew the vendors, the contractors, etc. Now? It would be tougher.
I can remember reading Bertel Schmitt over at TTAC [1] years ago. You will find very few people in the world who can write well enough and have the level of car industry knowledge that he has. If I remember correctly, he started working at Volkswagen in the 1980s.
I can still remember an article about a Toyota factory [2] that is quite the opposite from this Volvo factory
Wow interesting read that the Toyota factory is the opposite. I think some adjustments where made targeting property cost in Japan are much higher but overall the property cost compared to total factory investment cost are low. But also the Chinese factory is producing higher margin cars compared to low revenue cars from Toyota.
Toyota's manufacturing methods are well known at this point...
If you've read about Lean Engineering or the Toyota Kata or even foundational devops books like The Phoenix Project, you've been beaten over the head with the idea that Toyota's process is highly effective. (And it is)
The title is supposed to be "Some people go to car production hell. I went to production heaven." The original article doesn't have car in the second part of the title.
So the tl;dr of this article is that tesla doesn't have the institutional knowledge of volvo and is still trying to figure out how to build a factory, meanwhile, volvo's parent company saw astronomic growth while tesla's value merely almost doubled.
Eh...I'm not sure that's it. I read this much more as 'Volvo is trying to rethink what they are trying to accomplish and why with a factory' as compared to Tesla who is 'struggling to push sustaining innovation of an outdated factory model that they don't really understand'.
This is an over dramatic take. It's too soon to know how Volvo's China factory is working, the initial signs are promising but there's so much more to car quality than how the manufacturer assembles it.
Historically, we've seen inconsistent quality out of Chinese car parts and there's nothing you can do on final assembly to make a defective wheel bearing work better (the only option is to assemble the car with a better wheel bearing). To the extent that the Chinese volvos have Chinese component quality problems, the Chinese factory is further removed from production heaven.
Toyota's Tahara plant is recognized as the plant capable of the best car manufacturing in the world and it wouldn't be possible without the Japanese supplier base. It would have been nice if they compared and contrasted Tahara with Fremont but the Chinese Volvo plant offers a better comparison in terms of modernity.
But I had a horse in the race. I was a model 3 reservation holder but opted for the refund when the quality issues came to light. I take machine quality very seriously and I was worried about resenting the build quality on my model 3. Though I think Tesla can get it right, the complexity of an electric car is much lower than an ICE car.
Toyota has had a target on its back since about 1973 (when its quality advantage became decisive) - everyone benchmarks Toyota's manufacturing. When Toyota launched the Lexus LS400 in 1989, GM engineers concluded that they couldn't replicate the precision and quality with a blank check and an aggressive time frame. In 2010, Consumer Reports estimated that an average 1993 Lexus LS400 had as many trips to the dealer / failures as a brand new Mercedes S class. Now there are more issues at play with a 17 year old car than build quality, but good build quality is a good place to start.
I think Musk has called out Toyota by name as their benchmark. Tesla has a long way to go but I give them the highest odds of making it. They have the most opportunity to consolidate their supplier base. They have one of the most simple cars to manufacture and they have some the cheapest capital - they can turn it into a money game just like Amazon would. They're in the best position to actually hit the target on Toyota's back.
Correct, the 17 year old Lexus LS400 had as many issues as the 0-12 month old S-class. I'm trying to find a link but coming up empty.
The Lexus LS is an exceptionally well-built car. The quality took a bit of a dip from 2007-2011 but it was still head and shoulders above the rest of the full size luxury cars. But the other years aren't just reliable for full size luxury cars, they're among the most reliable cars on the road.
People joke that the LS series is the gold standard of quality but the 1993/1994, 1999/2000, 2005/2006, and 2012-2017 cars are the platinum water mark.
If you're at all interested in mechanical engineering and you get a chance to ride in one take it. It's really something else. The 1993/1994 ones are a special treat, they're astonishingly like a modern car in all but their infotainment capabilities.
A prominent member of the auto blogging crowd has one that he's trying to get to a million miles. Here's a story of one guy driving it cross country:
If you struggle with build quality with a $68,000 luxury car (the Tesla S) and then continue to struggle with build quality with a $35,000 luxury car (the Tesla 3), how does it make the least bit of sense to focus on increasing volume?
Electric cars being simpler to manufacture makes it more of a red flag that Tesla is struggling with build quality. It indicates that build quality is the harder-won competitive advantage, rather than the ability to design electric cars, the PR boost of having a "visionary founder", or being able to tap Silicon Valley for cash.
If that's the case, it's probably easier for Toyota to design, build, and sell electric cars as well as Tesla than for like Tesla to manufacture cars as well as Toyota.
>how does it make the least bit of sense to focus on increasing volume?
It's easier to amortize the investments in quality. Also, a less expensive car tends to be less complex, it's easier to make a high quality bare bones car than a high quality luxury car. Tesla is unique in that they started with luxury cars, all the other car companies that have started in last 100 years have started with more basic cars.
>Electric cars being simpler to manufacture makes it more of a red flag that Tesla is struggling with build quality
Yes and no. Compare Tesla to a bespoke car manufacturer, Tesla isn't shipping cars with loose radiator hoses but Lotus sometimes does (or they used to).
>It indicates that build quality is the harder-won competitive advantage, rather than the ability to design electric cars, the PR boost of having a "visionary founder", or being able to tap Silicon Valley for cash.
I think you're right on this point. It's a fundamental reason I'm not an investor in Tesla.
>If that's the case, it's probably easier for Toyota to design, build, and sell electric cars as well as Tesla than for like Tesla to manufacture cars as well as Toyota.
I completely agree. The only reason we haven't seen a battery electric, mass produced Toyota is because batteries just don't perform well enough. Toyota has uncompromising quality standards for all their cars - they need to work in hot deserts and cold tundras, batteries can't function in those environments very well. That's one of the reasons they stuck with NiMH for so long in their hybrids and one of the reasons they seem to have the most interest in glass batteries.
However, quality isn't the only thing that sells cars. More people bought Mitsuibishis/Nissans/Renaults from Jan to October 2017 than they bought Toyotas. I think there's room for one more good automaker, and I think Tesla's quality is 'good enough' for rabid fans, I think they can get there for 'normies', but the overlander / jihadist / 3rd world taxi crowd isn't going to give up Toyotas for Teslas any time soon.
I wouldn't bet on it. Japan was making state of the art products by the 50s - within 15 years after the war. I've heard people say that China is going to become the next Japan for at least 15 years and it's still not true.
Having lived in and worked daily with the former for about 15 years from 1985 to 2000, and the latter for a similar period afterwards, I would say: don't bet on it. Culture matters. And China has demographic scale problems that dwarf those of the Japanese. But! We'll see!
It is interesting to see the trend in the machinery: while the factory is in China, and the brand is Swedish, all the precision machinery, instruments, etc. come from Switzerland and Germany. Güdel, ABB, Carl Zeiss, Kuka, etc.
That isn't really new... If you look at Machine tools, Europe generally has the strongest base because their history with them goes way way back (think...first cannons). There are manufacturers in the US (e.g., Haas, Gleason) but they are smaller market and either highly specialized or known for being good enough and less expensive (Haas).
Yes, I'm Swiss, people are usually surprised when they realise how industrialized Switzerland is, and how machinery (especially precision machinery) and not watches, chocolate or cheese, are our largest exports.
As I understand it, Haas has an entire facility solely dedicated to running full-time and supplying the machines that Apple installs in China for manufacturing iPhones--which are some of the most mechanically demanding products in the world.
I remember reading this from an article discussing the fact that it would be impossible for Apple to switch from metal to ceramic cases simply because they would have to redo a massive amount of tooling.
...and not the former 'workshop of the world', i.e. the UK.
There was a historical difference in manufacturing and how that gets invested in. In the UK, with the all important stock market, the culture was to take the profits and invest them in the city. Meanwhile, in Germany, if, for example you were 'BMW', then the thinking was different - let's invest in the company and make even more cars and even more profit.
What remained of British machine tool manufacturing was utterly crippled and gone for good when Margaret Thatcher arrived on the scene. The UK then gave up on manufacturing anything except weapon systems, if you were 'smart' then you would speculate on property rather than invest in a manufacturing company.
The cultural problem in the UK was short-termism, a focus on the share price and the profits for the quarter, not the next decade.
The robots came later, after the UK lost manufacturing (okay, not all of it, but manufacturing used to be what the UK was about). If you are already making die-casting machines then it is kind of logical to make a robot arm to get the part out of the die, so the German/Swiss/Scandinavian machine tool companies were able to move into that space.
As mentioned, when Thatcher came along it was game over, it was also impossible to sell European presses etc. into the UK market. So I am pleased to see these vast and wonderful machines being fully appreciated and used in China.
The article mentions that Tesla wants to do batch manufacturing and frames it as somehow bad thing in comparison to JIT used by other car makers. In fact JIT outsources the logistics chaos caused by inconsistencies of planned order betweeen different production steps to component manufacturers which does not make much sense with vertical integration.
Commonly used metric for out-of-orderness (ie. number of times when next serial number is smaller than previous one) usualy works out to single digit percents, which looks good on paper but in actual logistics reality means that order of components picked from warehouse is essentialy random (measured by edit distance between stored and picked order) and automating that is more expensive than doing manual picking.
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[ 2.7 ms ] story [ 175 ms ] thread> As we walk through the factory, our small group is permanently trailed by two firemen, with a big first aid kit in hand. Nothing happens.
Some controversial things are genuinely problematic but not all of them are.
I own a 2nd generation Volt and love it, never really cared for the styling or interior of the first generation but mostly because the range of the first attempt fell short of my needs. My current Volt solves both my problems, I have the ability to go all electric on my commute of 54 miles round trip if not 10 more in summer. I can go any long distance trip I want and not worry about being stranded or having to wait an hour or more for a recharge even 200 less miles.
https://dailykanban.com/2010/07/g-m-s-electric-lemon/
Here are the most interesting Gen I volt stats (currently at 416K miles and still running strong) https://www.voltstats.net/Stats/Details/1579
Given Volt has a decent battery, I would bet an average volt will have a life time around 300K. Its has its shortcoming in terms passenger space and styling, but its a work horse!
The 2nd generation it remains to be seen. Mine seems good so far.
It highlights the degree of misinformation and hype among analysts etc.
Their anti-Tesla bias is strong and well-documented. They've had legitimate criticisms but take what they say with a grain of salt.
That said, there's a whole bunch of other good explanations in this thread. Very informative.
This obviously can’t continue as china becomes more serious about environmental protection.
Also, I’m not sure how staying off the board will actually clean up their encoronments.
To say it does not care about environment is just plain ignorant. Anything is planned top down. They care anything and everything, as long as there is actual value or risk.
> This obviously can’t continue as china becomes more serious about environmental protection.
So who is being ignorant? Or are you claiming china was doing this all along for the last 30 years?
Anyways, I’ve been in a Southern chinese City during winter, I know what life is like without indoor heating.
I thought you mean they are not going to do anything because of their tracking records.
Maybe that is happening now (I still reserve judgement). I get what they did rural coal heating (but I’m sure there are plenty of cold villagers who didn’t get enough subsidies to use gas or electricity). It is definitely helps the air this season, though the real test will be January and February, which were actually regressions in 2017 vs. 2016.
Not to mention political point scoring over large job creation projects. With the rise of robot workers factories such as these might find themselves unwelcome in previously accommodating areas where their size, logistic needs and impact on the surrounding infrastructure were previously offset by job creation.
So at this sort of scale it's as much a question of logistics and impact to the surrounding area as it is one of pure engineering.
I also think the natural independent streak running through America (and Canada / Israel / UK / AUS to a lesser extent) draws more of us to software because you don't need to reach consensus to get things done.
You can see similar trends with respect to telecom infrastructure adoption in developing nations versus developed nations.
Another advantage China has is population. When you have well over a billion people, you can afford to throw them at the problem and try out numerous things. Failure becomes an option because they have both the people to try it, and the space to try it in.
Their government also has a willingness (unlike in the US, and not as common in Europe anymore) to step in and subsidize costs to encourage moving in a certain direction in order to grow their national economy. The US, in particular, doesn't do this or does it haphazardly due to the frequent changes in political leadership (we could never create and stick with a 10 year plan, for instance).
I also suspect China, as a whole, is willing and able to move mountains (perhaps literally?) to win factories. Entire cities exist just to build "widgets" for the rest of the world.
I remember a similar article/editorial that made similar points about electronics production. China has both the engineering professionals and the factory line staff on-hand to spin up massive efforts in short time. The US simply doesn't have that many people in any one place like China does.
Add to that snowball effects...everything else is there. Everyone else is building there....it is physically closer to things, but land is still (relatively) cheap.
Compare the permitting process/cost + available land + available workforce + general cost of doing business + general government mindset + a well established supply chain to distribute products outward + a poorly tapped market for cars locally (local versions are truly terrible) + lack of political uncertainty in China as compared to Japan. Japan, Indonesia, the US, Ghana, etc. might better on a few of those metrics but the overall model makes China a minimum in terms of risk.
You add to that that as companies increasingly globalize they are developing significant competencies to build factories and do business in places further afield. First this was partnered outsourcing, because it bought a partnership that knows the local affordances and externalities. Now that they have the competency, they can do it anywhere because they have learned to do it anywhere[0] and look to run the minimization routine. Toyota is actually shrinking the size of plants so they can be more agile not just in models and output but in plant location...right now the math says china, later it might say Africa.
[0]https://dailykanban.com/2015/03/toyotas-tnga-tps-2-0/
This is was a result of China's mercantilist trade policy - e.g. suppressing the value of the yuan/subsidizing industry
-> manufacturing moves to China
-> ecosystem gets richer
-> manufacturing becomes more valuable in China
-> more manufacturing moves there.
etc.
It took 20-30 years to get the ball rolling before network effects took over, but now if you want a specific kind of LED or a different size bolt at scale the chances are the pearl river delta will be the easiest place to source it and if that's what you want to build, it's the best place in the world to sell it.
The economic risk this presents to the rest of the world is severely underestimated. Industrial ecosystems take decades to grow and decades to decline, but access can be cut off overnight.
The benefits of network effects that cause software companies to concentrate in a few areas are even more pronounced in the hardware field.
That's an extreme example of the problem, but I think it's endemic in the UK being so centered around the financial industry. While the middle class is centered around the cottage industry of rising property prices. The most ambitious people go into finance, not businesses where you actually have to make something or deal with employees. The factory, employees and culture surrounding that then just become tradeable tokens that will have their surplus value extracted and then discarded. Meanwhile it's hard to get ambitious, effective managers because people with that skill set are earning a lot more elsewhere in the economy.
A lot of what makes a good manufacturing process is, effectively, oral culture - passed on through apprenticeships and shadowing skilled technicians. Attempts to document it are surprisingly hard (this is why ISO9001 et al are unpopular). So in order to get a good factory startup you have to get experienced staff, which is easier in a cultural location that already has them.
That is also what will ultimately bring us down. I have a suspicion that a more general formulation of this effect is a major cause of why civilizations collapse.
Management styles and staff reflect this...
example https://en.wikipedia.org/wiki/GM_Financial
Edit: I guess what I'm saying is; things will stratify. Someone will always be "paying the rent".
those people are called the poor. and they get the bad end of the stick.
As with all parasitic systems, sometimes the host is killed and sometimes the host fights back.
Right now the host doesn't appear to be fighting back very effectively.
The latter is largely how Trump managed to grow his wealth; he's pretty bad at the former.
This provides a good summary of this principle: https://en.wikipedia.org/wiki/Georgism
As a counter point, it felt like the engineering talent is still from European countries - note that the plant manager is European, and the machinery they use in the factory is again by a European company. So the upper management that you say moved to finance is still in the industry.
Another reason I think is what some sibling comments of yours have pointed out - lax rules and willingness to co-operate with tech advancement (at the risk of environmental degradation)
Read Thomas Sowell's Culture and Migrations for more on this and the historical evidence.
https://www.amazon.com/Migrations-Cultures-World-Thomas-Sowe...
The difference in resources and capacity are so vast, businesses like Apple have depended on these differences to make their huge profits.
Steve Jobs has advocated US jobs and US factories and has said he would do everything he could, but the truth is, even Apple is/was too dependent on Foxconn, and there would be no Apple as we know it otherwise.
1. '"You can't find that many in America to hire," Jobs told the president, according to his biographer, Walter Isaacson. "If you could educate these engineers, we could move more manufacturing plants here."' [1]
2. When Apple needed to change the glass on their iPhones last minute, Foxconn obliged. The flexibility, speed, and sheer scale of their assembly operations are unmatched. [2]
3. Foxconn leverages Chinese work ethics and culture to its maximum. The world marveled at 2008 drummers in perfect sync at the Chinese Olympic opening of 2008 [3]. Now just imagine them building phones.
It also doesn't help that costs are lower.
So Apple wouldn't exist without Foxconn, and Foxconn wouldn't exist without China.
Now Foxconn is outgrowing China, and is building factories elsewhere. But Foxconn city isn't going anywhere anytime soon, and arguable, whatever they do elsewhere will never match what they've build in China, nor will they ever cease to be dependent on its output.
When Apple fails, you know the scale of the problem.
--------
[1] http://money.cnn.com/2012/10/17/technology/apple-china-jobs/...
[2] http://www.nytimes.com/2012/01/22/business/apple-america-and...
[3] https://www.theguardian.com/sport/2008/aug/09/olympics2008.o...
As I understand it, the problem is that China is getting too expensive for Foxconn.
Wages are rising in China, so Foxconn is hunting for somewhere cheaper.
In the US they will build factories and do the best they can with a US based factory. And same with everywhere else. Each location will give rise to various cost and performance attributes, but at the end of the day, they will:
1. Compete regionally with factories that share those exact same constraints.
and
2. Be Foxconn. All their factories belong to them, giving them unparalleled leverage and output capacity than the mere sum of their parts.
US companies will flock to Foxconn's "US" factory. It will be in quotes because nothing will stop them from doing absolutely everything beyond what will qualify as Made in USA elsewhere to minimize costs and maximize performance, as do US companies do already. But no one is Foxconn.
Expertise means that the architects and construction guys have done it before. The regulators get it.
When I was in the business of building out and managing on-premise data centers, our team could get a project off the ground in a few days. We knew the vendors, the contractors, etc. Now? It would be tougher.
I can still remember an article about a Toyota factory [2] that is quite the opposite from this Volvo factory
[1] http://www.thetruthaboutcars.com/author/bertel-schmitt [2] http://archive.fortune.com/2011/02/18/news/international/toy...
If you've read about Lean Engineering or the Toyota Kata or even foundational devops books like The Phoenix Project, you've been beaten over the head with the idea that Toyota's process is highly effective. (And it is)
Some people go to car-production hell. I went to car-production heaven.
Historically, we've seen inconsistent quality out of Chinese car parts and there's nothing you can do on final assembly to make a defective wheel bearing work better (the only option is to assemble the car with a better wheel bearing). To the extent that the Chinese volvos have Chinese component quality problems, the Chinese factory is further removed from production heaven.
Toyota's Tahara plant is recognized as the plant capable of the best car manufacturing in the world and it wouldn't be possible without the Japanese supplier base. It would have been nice if they compared and contrasted Tahara with Fremont but the Chinese Volvo plant offers a better comparison in terms of modernity.
But I had a horse in the race. I was a model 3 reservation holder but opted for the refund when the quality issues came to light. I take machine quality very seriously and I was worried about resenting the build quality on my model 3. Though I think Tesla can get it right, the complexity of an electric car is much lower than an ICE car.
Toyota has had a target on its back since about 1973 (when its quality advantage became decisive) - everyone benchmarks Toyota's manufacturing. When Toyota launched the Lexus LS400 in 1989, GM engineers concluded that they couldn't replicate the precision and quality with a blank check and an aggressive time frame. In 2010, Consumer Reports estimated that an average 1993 Lexus LS400 had as many trips to the dealer / failures as a brand new Mercedes S class. Now there are more issues at play with a 17 year old car than build quality, but good build quality is a good place to start.
I think Musk has called out Toyota by name as their benchmark. Tesla has a long way to go but I give them the highest odds of making it. They have the most opportunity to consolidate their supplier base. They have one of the most simple cars to manufacture and they have some the cheapest capital - they can turn it into a money game just like Amazon would. They're in the best position to actually hit the target on Toyota's back.
You mean the sedan has overall the same sum of issues after 7 years as a brand new after e.g. one year?
The Lexus LS is an exceptionally well-built car. The quality took a bit of a dip from 2007-2011 but it was still head and shoulders above the rest of the full size luxury cars. But the other years aren't just reliable for full size luxury cars, they're among the most reliable cars on the road.
People joke that the LS series is the gold standard of quality but the 1993/1994, 1999/2000, 2005/2006, and 2012-2017 cars are the platinum water mark.
If you're at all interested in mechanical engineering and you get a chance to ride in one take it. It's really something else. The 1993/1994 ones are a special treat, they're astonishingly like a modern car in all but their infotainment capabilities.
A prominent member of the auto blogging crowd has one that he's trying to get to a million miles. Here's a story of one guy driving it cross country:
https://thegarage.jalopnik.com/im-driving-a-lexus-with-900-0...
Electric cars being simpler to manufacture makes it more of a red flag that Tesla is struggling with build quality. It indicates that build quality is the harder-won competitive advantage, rather than the ability to design electric cars, the PR boost of having a "visionary founder", or being able to tap Silicon Valley for cash.
If that's the case, it's probably easier for Toyota to design, build, and sell electric cars as well as Tesla than for like Tesla to manufacture cars as well as Toyota.
It's easier to amortize the investments in quality. Also, a less expensive car tends to be less complex, it's easier to make a high quality bare bones car than a high quality luxury car. Tesla is unique in that they started with luxury cars, all the other car companies that have started in last 100 years have started with more basic cars.
>Electric cars being simpler to manufacture makes it more of a red flag that Tesla is struggling with build quality
Yes and no. Compare Tesla to a bespoke car manufacturer, Tesla isn't shipping cars with loose radiator hoses but Lotus sometimes does (or they used to).
>It indicates that build quality is the harder-won competitive advantage, rather than the ability to design electric cars, the PR boost of having a "visionary founder", or being able to tap Silicon Valley for cash.
I think you're right on this point. It's a fundamental reason I'm not an investor in Tesla.
>If that's the case, it's probably easier for Toyota to design, build, and sell electric cars as well as Tesla than for like Tesla to manufacture cars as well as Toyota.
I completely agree. The only reason we haven't seen a battery electric, mass produced Toyota is because batteries just don't perform well enough. Toyota has uncompromising quality standards for all their cars - they need to work in hot deserts and cold tundras, batteries can't function in those environments very well. That's one of the reasons they stuck with NiMH for so long in their hybrids and one of the reasons they seem to have the most interest in glass batteries.
However, quality isn't the only thing that sells cars. More people bought Mitsuibishis/Nissans/Renaults from Jan to October 2017 than they bought Toyotas. I think there's room for one more good automaker, and I think Tesla's quality is 'good enough' for rabid fans, I think they can get there for 'normies', but the overlander / jihadist / 3rd world taxi crowd isn't going to give up Toyotas for Teslas any time soon.
http://www.worldstopexports.com/switzerlands-top-10-exports/
https://en.wikipedia.org/wiki/Economy_of_Switzerland#/media/...
I remember reading this from an article discussing the fact that it would be impossible for Apple to switch from metal to ceramic cases simply because they would have to redo a massive amount of tooling.
There was a historical difference in manufacturing and how that gets invested in. In the UK, with the all important stock market, the culture was to take the profits and invest them in the city. Meanwhile, in Germany, if, for example you were 'BMW', then the thinking was different - let's invest in the company and make even more cars and even more profit.
What remained of British machine tool manufacturing was utterly crippled and gone for good when Margaret Thatcher arrived on the scene. The UK then gave up on manufacturing anything except weapon systems, if you were 'smart' then you would speculate on property rather than invest in a manufacturing company.
The cultural problem in the UK was short-termism, a focus on the share price and the profits for the quarter, not the next decade.
The robots came later, after the UK lost manufacturing (okay, not all of it, but manufacturing used to be what the UK was about). If you are already making die-casting machines then it is kind of logical to make a robot arm to get the part out of the die, so the German/Swiss/Scandinavian machine tool companies were able to move into that space.
As mentioned, when Thatcher came along it was game over, it was also impossible to sell European presses etc. into the UK market. So I am pleased to see these vast and wonderful machines being fully appreciated and used in China.
Commonly used metric for out-of-orderness (ie. number of times when next serial number is smaller than previous one) usualy works out to single digit percents, which looks good on paper but in actual logistics reality means that order of components picked from warehouse is essentialy random (measured by edit distance between stored and picked order) and automating that is more expensive than doing manual picking.