- Elon Musk spent over an hour on the Recode/Decode podcast, talking about Tesla.
- He offered what has become a familiar lecture about why Tesla has struggled with its auto-manufacturing supply chain.
- Everybody in the auto industry knows about the supply chain and takes it for granted. Musk, however, seems fixated on it.
Tesla CEO Elon Musk participated in a lengthy Recode/Decode podcast interview with Kara Swisher this week. In over an hour, he covered a lot of ground. It’s worth a listen.
I got through the whole thing, hearing all about how painful it was for Musk to work the 100-plus-hour weeks that were required to address the numerous problems with the fraught ramp-up for production of Tesla’s Model 3 sedan.
I shared Musk’s pain – because, honestly, it’s agonizing to listen to him endlessly repeat the same tales of woe about how difficult it is to assemble an automobile while working with modern supply chains. I feel as if he’s hit this talking point dozens of times at this juncture. He typically notes that whatever slowdown develops in Tesla’s manufacturing process can be blamed on the company’s most sluggish supplier.
That’s certainly true, but it isn’t anything new. Swisher didn’t press him on this, and I didn’t expect her to. She probably doesn’t have a detailed understanding of the auto industry, and she doesn’t need to. She’s a technology journalist. But she could certainly say something like, “Great, sounds like a challenge – but isn’t everybody else who makes cars also grappling with this? Or not.”
She was just the lastest audience for this Muskian lecture. Don’t get me wrong; Musk’s lectures can be fascinating and important. They have genuine value. But his “Carmaking 101” spiel often gets trotted out for the more seasoned automotive media and for investment-bank analysts who have spent years covering major global automakers that wrestle with supply-chain management every single day.
Musk is telling us something that everybody already knows
The bottom line is that when Musk launches into this lecture, my reaction has generally been to ask, “Why are you being so strenuous in telling me something I already know?” It would be like if I spent 10 minutes informing him that gravity is a fundamental consideration in the design of rockets intended to deliver payloads to orbit.
The way that cars are now built is the result of widespread adoption of something called the Toyota Production System, developed by Toyota in the 1970s and 1980s. (Musk, by the way, has critiqued TPS, not without justification.) Essentially, TPS strived for “just in time” inventory management: a part is supposed to arrive at the vehicle-assembly point at the moment it’s needed. Deft supply-chain management means that large and costly inventories don’t have to be stockpiled.
Everybody in the car business is aware of this. It’s a given. In fact, nobody except Musk ever talks about it. In more than a decade of covering the auto industry, I’ve enjoyed a few conversations with experts in “lean manufacturing,” but supply chain is a background thing, the endless low hum of machine running around the globe.
Serious issues do arise every so often. Ford had to dial back some crucial F-150 pickup-truck production this year due to a fire at a supplier. A number of carmakers have had to deal with the massive recall of airbags manufactured by Takata. And after the 2011 tsunami and nuclear disaster in Japan, Toyota and Honda saw their supply chain disrupted for months.
Why does Musk keep coming back to this?
So why does Musk so frequently revisit this rap?
Part of it is because Tesla hasn’t always had access to the best suppliers, nor the top teams at supplier. That was simply a consequence of Tesla’s scale. The situation has improved.
You might suggest that Musk is engaged in misdirection or blame-shifting. But I don’t think he is. Rather, I think he dislikes expressing severe frustration and uses various flavours of lecture-y wonk speak as a way to avoid it. He adores technical detail. It calms him down.
Should I begrudge Musk his coping mechanism? No. But it’s getting a bit old, and what Musk likes to call “production hell” is starting to look like something Tesla is having a hard time either avoiding or learning from. It’s actually important that Tesla improve its ability to make cars, so that it can address impressive demand for its vehicles and achieve Musk’s objective of accelerating sustainable transportation.
So it doesn’t entirely matter if the lecture about supply chains is actually misdirection. It’s turned into an annoyance at best and a distraction at worst.