If I were to start a automotive company I'd leverage the infrastructure that already existed, in Detroit, where there are factories and people who build cars.
CEO Elon Musk of Tesla Motors has convinced the US government to spot him 350 million dollars. That's 350 million dollars for a company that wants you to buy their electric sports car with the $100,000 you have under your mattress. Now I see why he wants to build them in California — you won't find Rodeo Drive on a map of Detroit, but you will find Gratiot.
This is obviously a sign that the Obama administration wants to end foreign oil dependence, but to give them $350 million because they have 1,000 customers waiting for a roadster? C'mon, just because some wealthy people can buy a neat little electric sports car doesn't mean this company can grow to the likes of the Big Three. What are Tesla's manufacturing capabilities, and who do they have that can scale an automotive manufacturing company? Because so far they are having some difficulty producing a few thousand cars.
What about Detroit? Seems that Tesla decided to shut down that operation by firing 90% of the staff and notifying them via their blog. They then relocated the rest to California where they plan to manufacture these cars. They were supposed to have a site in San Jose, but that fell through. An area that's been building cars for 100+ years with skilled labor and an infrastructure in place, and who knows how to get its hands dirty and get to work, and Tesla says no, we can do it in Cali?
Sure, they did build a neat little electric car but what's the safety rating? Any long term testing on real world applications? I wonder how one of these would handle in the rain or snow, seems they love to test them in Cali, but how realistic is that for a company that hopes to revolutionize the industry?
Thanks to some Silicon Valley geeks and their buckets of money we are now going to trust a web 2.0 company to lead the auto industry — how sad. It's not that I don't like these Internet start-ups, having started one myself, but they just operate on a different level than most businesses mostly due to the speed with which software can be built. Changing things too fast can cause instability in the supply chain, and this brings up another question. Who are the suppliers for Tesla and how do they perform?
People devoted their lives to these companies, like my great-grandmother who worked at Chrysler for 40 years sewing together leather interiors — or maybe it was "pleather" — but she would always have money in her pocket to take us out for a hamburger or buy us some shoes. When I say she had money, I mean actual money, not credit cards like everyone seems to use today. Thanks to the billions the government just gave to the banks so they can give us more credit cards instead of the small business loans we need so desperately to rebuild this country. As Mitch Albom kindly points out, we sure are watching over our banks, a lot of good they are doing for the country.
When I was just out of high school I worked for a company in Redford, Michigan that made "screw machine products." People came from all over the world to live and work in Detroit, like Frank Sherosky who worked on the screw machines. Frank came from the coal mines, and hitchhiked to Detroit to build a better life for his family.
So what stories like that do you think Tesla is capable of producing? Do you think people like Frank will be able to spend 30 or 40 years at Tesla?