From John D. Stoll’s “Time for Tesla to Study The Apple Playbook” in Saturday’s Wall Street Journal ($):
Last spring, I flew to Tesla’s California factory in Fremont and asked [Elon] Musk whether a better solution to his production puzzle might be to hire out the job to an experienced auto-production shop. He scoffed: “If we don’t solve the production we’re going to die. I need to create a case example of what can be done.”
Once upon a time, Apple felt the same way. Co-founder Steve Jobs built a gleaming state-of-the-art computer factory, also in Fremont. Mr. Jobs was fascinated by the exploits of Henry Ford and Japan’s Sony Corp. , but his efforts to replicate them failed and the plant closed.
To Mr. Musk, car production is a math equation that should be solved. By adding automation and continually improving processes, efficiency will rise and costs will plummet, all while keeping Tesla’s fate in its own hands.
That’s been costly, though, with Tesla reporting very little profit over the past 15 years and burning through a bundle of cash. Last week, the company said it will lay off about 7% of its workforce, sending its stock falling on fears the company has become bloated. The 16% decline in its share price since then pulled its market capitalization below General Motors Co.
My take: Backseat driver.