Should Tesla Swoop In And Buy A GM Factory Or Two?

Last time Tesla bought a shuttered GM factory, it turned out pretty well for the electric automaker.

Now there could be another occasion for Tesla to take over a shuttered GM plant as the automaker is restructuring its operations. Back in 2010, Tesla bought NUMMI, a car factory jointly owned by General Motors and Toyota in Fremont California, for just $42 million shortly after it was shut down.

The company gradually built the workforce back, including many former NUMMI workers, and now 8 years later, Tesla Fremont employs more employees than the original factory and it produces electric vehicles at a rate of over 300,000 units per year.

atc98092 - 11/27/2018 2:30:29 PM

+2 Boost

Might be an idea. But Tesla needs the space now, and GM won't be vacating those lines until sometime later next year.

Vette71 - 11/27/2018 5:03:13 PM

+2 Boost

Does Tesla really need the space? Plant commitment to China means more space there. Depends on what the steady state demand for the Model 3 is after the order backlog has been filled. If its a "pig in a python" the tent could look like a smart temporary move to satisfy a temporary situation.

TheSteve - 11/27/2018 3:09:57 PM

+5 Boost

Tesla should focus on their productivity. Remember, Tesla currently operates from the same factory where GM and Toyota had their information-exchange experiment. Even while operating from the same factory for years, Tesla has yet to reach the production numbers that GM/Toyota had from the outset, before they ironed out their kinks.

Tesla: Focus on "better," not on "more plants." Better build quality. Better defect numbers. Better production techniques. Better ability to deliver. Better "productivity per worker". Etc.

SanJoseDriver - 11/28/2018 2:49:58 PM

+1 Boost

They have brought in more revenue from the factory than GM/Toyota, but not unit output.

EVisNow - 11/27/2018 3:34:26 PM

+1 Boost

Going into UAW territory in Michigan would be asking for trouble - for any company not just Tesla.

Tesla already has something cooking in Lathrop CA, a short distance from both GF1 and Fremont - it doesn't look like a facility for part distribution or short-term storage. Maybe they learned something from building General Assembly ("the tent") at Fremont and build a larger one indoor there ?

Vette71 - 11/27/2018 4:56:57 PM

+2 Boost

Agree with your first part. Smack in the middle of UAW territory. Probably will scare any auto firm from going there. There are lots of empty auto plants all over Ohio and Michigan that nobody has found a use for. Lordstown was built to build the Vega almost 50 years ago.

PUGPROUD - 11/27/2018 3:55:07 PM

-3 Boost

Car manufacturing lines are car/chassis specific. Other than the buildings outer structure starting from scratch would likely be cheaper and more efficient in the end. Plus training your own new employees likely much better than trying to retrain GM employees and integrating into your culture.

vdiv - 11/27/2018 8:42:24 PM

0 Boost

Think bad blood between GM and Tesla and a long supply chain would be greater drawbacks than reusing the existing infrastructure and retraining employees. On the contrary, Tesla can benefit from their experience and concentration.

TomM - 11/27/2018 5:43:37 PM

+3 Boost

Tesla does not have the CASH available to buy these factories - if they did - they would have brought out the Base Model 3 - which they Promised by November (I have not seen one - have You?)

SanJoseDriver - 11/29/2018 3:52:42 AM

+1 Boost

Even if they had $100 billion in cash, they should still not mass produce a car if it can't be built without a positive gross margin.

ricks0me - 11/27/2018 6:21:28 PM

+1 Boost

Vette71 said: Lordstown was built to build the Vega almost 50 years ago.

Maybe GM needs to bring an updated version back with a reliable engine and different name. A modern Cosworth type Vega ... Hell Yeah!

They need something to fill in where Cruze, Volt, etc left off. Small cars still sell when done the right way. Corolla anyone?

Vette71 - 11/28/2018 10:17:45 AM

+1 Boost

Amen to the Cosworth. Back then my commuter car was a Vega GT hatchback. A lot of fun to drive. The rust, including an area at the roof/windshield junction that meant my pants got wet whenever it rained, sealed it's fate. That and adding a quart of oil on every third fillup.