Chapter 8 Reinventing the Biggest Factories of All

There’s no manufacturing business like the car business. If that can be transformed, anything can.

There is HO law that says that Maker companies have to remain small. After all, many of today’s biggest Silicon Valley giants, from Hewlett Packard to Apple, started in a garage, and on the Web the dorm-room-to-riches story is now so common that computer science students who stick around long enough to finish their degree risk being considered lacking in entrepreneurial gumption.

For instance, the company Γm involved in, 3D Robotics, is avowedly a hobbyists’ company: enthusiasts make products for en­thusiasts. With a turnover of around $5 million, it’s certainly not an insignificant economic force, and there’s probably an inevitable limit to how big it can grow given our niche focus. Nevertheless, it does demonstrate how quickly and successfully Maker companies can evolve—we’re less than three years old, and hardware manufacturing companies like ours often get to $ 10 million in revenues in less than five years.

But at the end of the day, the Maker Movement will be judged not just on how it can change product categories and entrepreneurial fortunes, but also on how much it can move the needle for an entire economy. And to do that, it will have to be able to influence the big­gest manufacturing industries—the car industry being the biggest of all. Even here, in one of the toughest of all manufacturing sectors, it’s already possible to see a future for Makers. While they may not have massive economies of scale, they do have the flexibility and focus that defines companies that are most connected to their customers today.

There have, of course, always been niche car companies and small suppliers in the automotive industry. But that’s been an increasingly tenuous place to be, as anyone knows who has watched the gradual decline and sale of most of Britain’s specialist car companies to multi­national giants. The problem is that the conventional car industry has historically proven a hostile place for innovations. To see how, con­sider the story of the creation of the intermittent windshield wiper.

The trials of a 20th-century inventor

On his wedding night in 1953, a young engineer named Robert Kearns was hit in the left eye with a champagne cork, rendering him legally blind in that eye. A decade later he was teaching at Wayne State College in Detroit, and among the many things that bothered him about his diminished eyesight, the distraction of the windshield wipers of his Ford Galaxie in the rain seemed like one thing he could do something about.

The wipers were annoying, and not just for people with only one good eye. When they were on, they constantly moved back and forth, regardless of how hard the rain was falling. You could slow them, but you couldn’t pause them, even if it was only sprinkling. It was as if your eyelids were continually opening and closing, rather than blink­ing every now and then. For a man with impaired vision, the constant motion was yet another distraction while driving. For an engineering professor it was a challenge to find a better way.

Kearns went into his basement workshop and began tinkering. He prototyped an electrical delay circuit on his workbench, which

Reinventing the Biggest Factories of All ∣ 121 gradually charged a capacitor to pause a set of wipers for an adjustable length of time, depending on how hard it was raining.As depicted by Greg Kinnear in the 2008 movie Flash of Genius, which tells this story, Kearns exuberantly demonstrates the working model to his kids with wiper motors swiped from his wife’s car, and a plate of glass: “It’s aliiiive! ” The kids are suitably impressed and even help with soldering (this is the Hollywood version, after all).

That picture is remarkably similar to my grandfather’s, as I re­member it, minus the theatrics. The difference is that Kearns then made a decision my grandfather did not. Although both filed a pat­ent application on their invention, Kearns decided not to license his invention to the car companies. Instead, he decided to make his in­termittent windshield wiper himself and sell it to them as a finished product. Ford signed on to install Kearns’s wipers in one of its new models. That meant he needed to build a factory.

Kearns borrowed money, took an investment from a partner, remortgaged his house, and otherwise scrabbled together the huge sums necessary to make a wiper factory in the mid-1960s. It was a staggering undertaking, and, as events would soon show, unwise.

The scenes where he sets up the factory are telling. First, there is the renting of a 30,000-square-foot industrial space, all open areas with only columns standing between the exterior brick walls and loading docks. Then the space must be filled with production equip­ment. Men in hardhats carry steel racks around and drive forklifts, carrying roller bearings for conveyer belts—a classic industrial-age picture. Finally, there is the meeting with Motorola to arrange for the purchase of transistors, which requires negotiated credit from the company’s finance department. Scary stuff for a small entrepreneur.

It would get scarier. As Kearns is getting close to firing up his facility, Ford abruptly backs out of the deal. Kearns’s phone calls aren’t returned, and he has no idea why. With no revenue in sight, the factory shuts down before producing a single wiper.

Eighteen months later, Kearns is returning to his car in the rain and sees a trio of brand-new Ford Mustangs turn the corner, driving to their big rollout party. Their windshield wipers sweep, then pause, then sweep again. His brilliant idea has been stolen.

Kearns eventually sued Ford and Chrysler for patent infringe­ment and, after years of litigation, eventually won nearly $30 mil­lion from Ford and Chrysler, after $10 million of legal bills. But this fight against Ford was not about the money, he insisted—it was about the principle of the thing. His obituary in 2005 reported that “all he wanted, he often said, was the chance to run a factory with his six children and build his wiper motors.”²⁹ He never got that chance. It was just too hard back then.

Today Kearns would do it differently. As before, he would have made the first prototype in his basement. But rather than building a factory, he would have had the electronics fabbed by one company and the enclosure made by another. He then would have paid a wiper manufacturer in Guangdong or Ohio or any of countless other places to create a custom assembly with these components. They would probably be shipped straight to his customers, the car companies, and the whole process would have happened in months, not years—too fast for big companies to beat him. No factory, no lawsuits, no mad­ness. He could have fulfilled his dream of turning his invention into a company without tilting at windmills.

Genius, reflashed

There’s no need to imagine this scene. You can see something like it today. Just go to Chandler, Arizona, and find the Local Motors fac­tory in a converted recreational vehicle warehouse twenty minutes

Reinventing the Biggest Factories of All ∣ 123 south of Phoenix. Columns draped with potted plants soften the inte­rior, a design detail borrowed from a Ferrari facility (although they’re a challenge to keep healthy under artificial light), but otherwise this looks more like a car dealership than a factory; there is, for starters, no production line.

This is where the world’s first open-source cars are being pro­duced, starting with a $75,000 Baja racer called the Rally Fighter, with curves inspired by a fighter plane. The Chandler site is just the first “microfactory” of many the company plans to build across Amer­ica, each with about forty employees. Each will manufacture cars cre­ated by the community, which helps build them, too. It’s a glimpse into a whole new way to design, engineer, and produce cars—and maybe lots of other things, too.

Local Motors is a car company built on Maker principles. Its de­signs are crowdsourced, as is the selection of mostly off the-shelf components. It doesn’t patent ideas—the point is to give them away so that others can build on them and make them even better, for the benefit of all. It holds almost no inventory, and purchases components and prepares kits only after buyers have made a down payment and reserved a build date.

It started with a question: How would you build a car company on the Web? In 2007, Jay Rogers and JeffJones decided to find out. They created a site where car designers (professionals, amateurs, and just those interested in the process) could share ideas and vote on their favorites. They called the company Local Motors because they hoped that someday its manufacturing could be as geographically dis­tributed as its community, with local “microfactories” serving as their dealerships. Rather than having a big central factory, the cars would be built on-demand by their customers, near where they live.

Rogers was practically destined for his job. His grandfather Ralph Rogers bought the Indian Motorcycle Company in 1945. When the light Triumph motorcycles began entering the United States after World War II, the senior Rogers recognized that his market-leading Chief, a big road workhorse, was uncompetitive. The solution was to make a new light engine so Indian could produce its own cheap, nimble bikes.

Today, Ralph Rogers’s grandson intends to do something even more radical—create a whole new way of making cars—on a shoestring budget. It’s just easier these days. His company has raised roughly $10 million, and he thinks that’s enough to take it to profitability.

The difference between now and then? “They didn’t have resources back then to enter the market, because the manufacturing process was so tightly held,” he says. What’s changed is that the supply chain is opening to the little guys.

Rogers and Jones believed that open innovation could change the way we drive. They phrased their mission like this:

The Old Paradigm

With high capital intensity, current global auto manufacturers design a single model, make hundreds of thousands of copies a year, and push it through a network of dealerships. Mass Cus­tomization and the search for low-volume runs is elusive and ex­pensive. The customer feedback loop is inadequate and broken.

How We Do It Differently

We will license a lightweight, superior safety chassis that can be produced profitably at 2,000 units/year. On top of that we will layer design from our open-source design community. This community empowers an army of hotshot competitive designers from around the world to innovate and refine design. Our team specifies the target segment that fits the price point. The commu­nity delivers the innovation. These designs are then transferred to our network of suppliers who deliver the necessary subassem­blies direct to the Local Motors facility on a just-in-time basis. All cars are assembled, tested for quality, and sold locally by a 20-person business unit at a facility with l∕100th the capital of today’s auto plants.

One of the great advantages of building such a car today is that it plays into the global automotive manufacturing trends of the past three decades. All those shifts, led by the Japanese, from monolithic factories to an ecosystem of suppliers providing parts on a just-in-time basis, means that practically anything you need is on the market and easy to get. Small companies may not get the parts quite as quickly or as cheaply as Ford, but the global automotive supply chain is es­sentially open to all. It can work in units of millions and units of ones: yet another scale-free network, just like the Internet.

The thirty-eight-year-old Rogers favors military-style flight suits, an echo of his time as a captain in the Marines, including action in Iraq, and he boasts both a Harvard MBA and a stint as an entre­preneur in China. While at Harvard, Rogers saw a presentation on Threadless, the open-design T-shirt company, which showed him the power of crowdsourcing.

Cars are more complicated than T-shirts, but both are examples of “platforms” on which many people can display their talents and col­lectively innovate. And in both cases there are far more people who can design them than are currently paid to do so. In the automotive world, the majority of students who study car design don’t get jobs in the industry; instead they end up designing toothpaste tubes or kids’ toys. That makes them frustrated would-be car designers, exactly the pool of talent that might respond to a well-organized vehicle design competition and community.

A competition for every hubcap

Local Motors started in Wareham, Massachusetts, about an hour south of Boston, in an industrial park behind Factory Five Racing, a kit-car company and investor in the new firm. The kit-car connection is both a part of Local Motors’ heritage and a warning of what it must avoid. Kit cars have been around for decades, standing as a proof of concept for how small manufacturing can work in the car industry. They combine hand-welded steel tube chassis and fiberglass bodies with stock engines and accessories. Amateurs typically assemble the cars at their homes, which exempts the vehicles from many regulatory restrictions (similar to home-built experimental aircraft).

In the kit-car business the vehicles are typically modeled after fa­mous racing and sports cars, making lawsuits and license fees a con­stant burden. This makes it hard to profit and limits the industry’s growth. Factory Five has sold only about eight thousand kits since it started in 1995.

Rogers and his cofounder saw a way around this. Their company would build only original designs; rather than invoking classic cars, they would reimagine what a car could be. The products would be created by its community, who are also its customers. But don’t con­fuse a community with a committee. The winning designs would be decided by voting and competition, not compromise and consensus.

In 2008, Local Motors started its contest for its first car, a Baja racer. To help steer the community and seed their work, Rogers chal­lenged them to use the World War ∏-era P-51 Mustang fighter plane as inspiration: it’s a classic and gorgeous aircraft that represents some of the qualities he hoped the car would eventually display: power, toughness, agility, and cool. Most important, it wasn’t already a car, so presumably the company wouldn’t get sued for infringing some­one’s intellectual property with the homage.

The winner of the overall design was Sangho Kim, a graphics design student at the Art Center College of Design in Pasadena, California

Reinventing the Biggest Factories of All ∣ 127 (he eventually claimed $20,000 in prize money for his contributions). But once his body had been selected, there were more than a dozen other competitions for subassemblies ranging from the rear-view mir­ror to the stylish vinyl “skins” that substitute for paint on the body. What all the contributors had in common was a refusal to design just another car, compromised by mass-market needs and convention. Theywanted to make something original—a fantasy car come to life.

In the end, more than 160 people contributed to the eventual design.

How to avoid the usual perils of committee design—either a camel or a gold-plated elephant? The Local Motors team exercises good old-fashioned leadership. At one point in the Rally Fighter design, the community fell in love with a taillight design of their own cre­ation. Okay, responded Rogers, we can do that. But it will add $1,000 to the price of the car. Replied the community, “We don’t love it that much! ” They settled on a seventy-five-dollar part from Honda, which actually looks absolutely fine on the car. Rogers gently led the com­munity into collectively getting smarter about car economics, without having to dictate the outcome.

It’s worth pausing a moment and looking more closely at the com­munity members, which now number some twenty thousand. They are a mix of amateurs and professionals, some already car designers, others designers from other fields, and yet others just car enthusiasts. They pick the problem areas they want to focus on, depending on what they know and what needs to be done: industrial design, dynamics,’’skins,” electromechanical systems, operations and sourcing, and others.

What they don’t do is pull rank based on credentials. Amateurs have as much influence as professionals. The same is true for almost any open-innovation community: when you let anyone contribute and their ideas are judged on the merits rather than the resume of the contributor, you invariably find that some of the best contributors are those who don’t actually do it in their dayjob.

Rogers describes the participants as falling into two classes: “so­lution seekers” and “solvers.” The first want something in particular done, and the second like to solve problems of any sort. Because it’s an open-source community, people creating things for their own needs tend to post them, both in the development to get help and advice, and after they’re done. And because there’s so much of this in-progress posting, there’s always something to help with if you’re so inclined. What makes the Communityworkis “homophily” (“love of the same”), the tendency for people to associate and bond with others like them in a network.

What this taps is the “Long Tail of talent”; in many fields a lot more people have skills, ideas, and time to help than just those who have professional degrees and are otherwise credentialed. Exposing this latent potential, both of professionals looking to follow their pas­sions rather than their bosses’ priorities and of amateurs with some­thing to offer, is the real power of open innovation.

Take the graduates of the Arts Center of Design, which is one of America’s top car design schools. It has about 180 students in its un­dergraduate transportation program, which is mostly about automo­biles, and many hundreds of others in related fields such as industrial design. An estimated fifty of them will eventually work for car com­panies. Most of the others will get jobs designing some other kinds of products and working for consumer packaged-goods companies.

So most of the car design students won’t design cars in their day jobs. Instead they’ll design toothpaste tubes and shampoo bottles. Nothing wrong with that, but for many of them the dream of design­ing cars is still there. Therejust aren’t enough full-time design jobs in the car industry for them. They have to do something else for a living.

But what the Local Motors community offers is a way to design cars even if it isn’t your job. Those Arts Center students who don’t end up in the car industry still have the necessary skills, experience, and ideas—they just aren’t going to be paid to do that by day. But at night they can still design cars, following their heart. And if their design wins, they could even make some money, as Sangho Kim did.

What makes these new models so powerful is that they tap the “dark energy” (or, as writer Clay Shirky calls it, “cognitive surplus”)

that’s been all around us already. It’s the ultimate market solution: open-innovation communities connect latent supply (talent not al­ready employed in that field) with latent demand (products not al­ready economical to create the usual way).

And if you can prove that you’re a great car designer in such a community, it might help you get a job actually doing that. Thanks in part to his Rally Fighter success, Sangho Kim did just that, and now works for GM in Korea.

Once the Local Motors community settles on a design, the com­pany’s engineers make it manufacturable. They construct a jig on which to weld the frame tubes and carve molds for the fiberglass body parts. Most other components are simply ordered from car parts suppliers such as Penske Automotive Group; the engines and transmissions can be bought straight from big car makers such as BMW and GM, who will sell to third parties. The axle of the Rally Fighter comes from a Ford F-150 truck; the fuel cap comes from a Mitsubishi Eclipse. This combination—have the pros handle the elements that are critical to per­formance, safety, and manufacturability while the community designs the parts that give the car its shape and style—allows crowdsourcing to work even for a product whose use has life-and-death implications.

The final assembly is done by the customers themselves under an expert mechanic’s tutelage, as part of a “build experience” at the Chandler factory. At any given time, a half dozen Rally Fighters are being built in two rows facing each other. Each has a custom tool cabinet and a rack of parts next to it; the mechanic coach is always working with one team or another.

As a buyer, you spend two long weekends (six days in total) assem­bling the car. You don’t need to have even so much as opened a hood before—you’ll have learned well enough how to do it by the time you’re done. The first lesson is how to properly attach a nut. First you use a torque wrench to tighten it precisely. Then you go too far and strip the bolt, so you can learn the difference between tight and over- tight. And so on for all the other fasteners and assembly techniques, for a foreshortened mechanic boot camp.

It’s mostly assembly, rather than real manufacturing. The steel tubing frames are already made, having been welded in a back room by two workers earlier. So are the fiberglass body parts. The engine is an off-the-shelf 6.2-liter V8 made by BMW or GM, and the auto­matic transmission is similarly stock. So too for everything else, from the dashboard gauges to the suspension. If you look closely, you’ll recognize that the rearview mirror is the same one found on a Dodge Challenger and the steering wheel comes from a Ford F-150.³°

Typically a team will be two people—often a father and son—but if you want to build the car yourself, with the coach’s help, you can. All you need to do is put the parts together. When you’re done, you can drive it home. Although the car is at its best racing through the desert and flying over bumps and ruts, it’s fifty-state legal, thanks to the stock engines that have already been tested and approved by the Environmental Protection Agency. So you can drive it to the mall, too, if you don’t mind the stares.

Because the customers make at least 50 percent of the car them­selves, all sorts of regulatory hurdles fall away, much as they do with “experimental” home-built aircraft, which are exempt from most Federal Aviation Administration regulations on the grounds that the owners are well enough informed to protect themselves, or to at least understand the risks. The Local Motors cars don’t have to be crash-tested and they don’t have to be fitted with airbags. Uncomfort­able with that? Then this isn’t the car for you. But there are others who are just fine with that.

Liability and consumer protection rules are also relaxed when cus­tomers make their own goods. When something goes wrong with your Rally Fighter, you don’t take it back to the “dealer” or wait for a recall. You built it, so you can fix it. After you finish the car and drive it home from the factory, you even get a toolbox with all the gear you need to repair the vehicle. You’re also part of a community that’s en­gaged and eager to help one another.

To walk around the factory is to see something that reflects both

Reinventing the Biggest Factories of All ∣ 131 the past and the future of the car industry. It’s the distant past, in the sense that these cars are built by humans, with wrenches and screw­drivers, much as the first horseless carriages were. There’s not a robot in sight (aside from the CNC machines that cut metal in the back room), and there are no assembly lines.

But it’s also the future: the open-source community approach means that designs are not just faster, cheaper, and better, but also come already market-researched (at least by the most avid would-be users). Products developed by a community are more likely to be em­braced by one. Several more designs are in the pipeline, and the com­pany says it can take a new vehicle from sketch to market in eighteen months, about the time it takes Detroit to change the specs on some door trim.

Local Motors proved this in early 2011, when the Pentagon’s DARPA research agency ran a competition for an “Experimental Crowd-derived Combat Support Vehicle” (XC2V). Local Motors’ community snapped into action and came up with a design within weeks, which was refined by the company’s engineers. Three and half months later the design had won, and a month after that Rog­ers presented it to President Obama. Of course, the competition was designed to favor Local Motors-Style communities, but it’s hard to believe that a traditional defense contractor could have even got the paperwork done in three and a half months, much less designed and built a new high-performance armored car from scratch.

Not your father’s DIY

How revolutionary is this? After all, DIY cars have been around for decades, and the humble dune buggy kit, with a fiberglass body on a VW bug frame modeled after the Meyers Manx design, was a fixture in the 1960s and 1970s. An estimated quarter million dune buggy kits have been sold,³¹ and they, too, use off-the-shelf car components and custom composite bodies, just like the Rally Fighter. They didn’t change the world, certainly didn’t threaten the big car companies, and they never really took off.

So what’s different now?

Nobody expects Local Motors to get huge or sell millions of cars; indeed, they’ve set a cap of only two thousand of each model (and they’re nowhere near that on their first). There have always been niche car companies selling exotic machines to enthusiasts; this is, in a sense, just another one. Rogers describes it as filling in the gaps in the marketplace for unique designs. He uses the analogy of a jar of marbles, each of which represents a vehicle from a major automaker. In between the marbles is empty space, space that can be filled with grains of sand—and those grains are Local Motors cars.

And at nearly $75,000 per car, it’s not cheap. And although the Rally Fighter is a high-performance racer, there are no great techno­logical innovations, nor is it doing anything other cars haven’t already done.

But Local Motors has created more than a car. It’s also created an innovation platform, in the same way that Apple’s iPhone is a plat­form for independent software developers to build a business around their own apps that run on it. Not only can Local Motors’ community produce new designs faster, cheaper, and better than the conventional way of small teams working behind closed doors, but also, because the designs are all online and open, community members can create their own projects and businesses around them. So if you think it would be cool to add an automatic tire inflation system to the design, just do it. If people like it, have it made and sell it yourself. No need to go through Local Motors and lobby the engineers to add it for you; the car is an open design, co-owned by its community.

Indeed, in late 2011, Local Motors launched Local Forge as a spe­cialized community to do just that.

“We’ll continue to do the ‘halo’ projects,” Rogers says, “but this platform is for the everything else.” Microfactories in San Francisco and Dallas are coming next to help build the community’s designs.

Still, that’s not so different from the third-party add-on markets that grew up around the old dune buggy designs. But what happens as cars become more like computers on wheels, driven by electric power systems and controlled by software? Then the notion of a “platform” becomes far more interesting.

The next market for Local Motors will be applying its model to electric cars. An electric car replaces the gas engine with electric motors on the wheels, replaces the gas tank with a stack of lithium­polymer batteries, and replaces all the mechanical aspects of a drive train with software. Anyone can buy motors and batteries, and, as the open-source phenomenon has proven, communities can often write software better than companies can. Now consider that electric cars are not stand-alone vehicles, but are part of entire networks—the smart electric grid at home, the network of distributed chargers on the street and the mobile phone networks, which they use to find chargers.

Whom do you trust to create great networked software and de­vices? You’ll probably include Apple and Google on that list, along with any number of tech startups, along with all the open-source projects that brought us so much of the network software that we use every day. But Toyota, Honda, Nissan, or even BMW and Mercedes probably don’t come to mind.

The shift from cars-as-manufactured-machines to cars-as-rolling- computers is where the difference between yesterday’s DIY cars and tomorrow’s will really become clear. Sure, the Rally Fighter is not so different from the dune buggy. But the first Local Motors electric car will be something else entirely. And then the power of the commu­nity development model may be something the big car companies not only notice, but envy.

GM’s Volt took six years and $6.5 billion to develop. Tesla is an electric car company built on Silicon Valley entrepreneur lines, but its Roadster took six years and cost $250 million. Meanwhile, the Rally Fighter took eighteen months and cost $3 million. Granted, the Rally Fighter is much less complicated than the two electric cars I’ve compared it with. But as we enter the electric age, the complexity becomes mostly in the bits, not in the atoms. And there’s no reason a smart community can’t do that faster, better, and cheaper than any single company.

How might that change things? Well, for starters it can create an alternative to the notion of planned obsolescence and disposability. As products like cars become more about their software than their hardware, it becomes possible to reverse the arrow of time—they can get better after you buy them, not worse.

Think of how a website improves as the site’s developers add new features and improve its design. Now imagine if your car did the same thing.

Cars are, after all, increasingly driven “by wire,” not mechani­cal linkages (if you have a new car, odds are neither your pedals nor your steering wheel are physically connecting to the engine or wheels; they’re Cssentiallyjustjoysticks that instruct software to actually move the vehicle). So why doesn’t the car company constantly update that software to improve the car’s performance, the way your computer Web browser is regularly updated?

The cynical answer is that the car company would rather you bought a new car. But a community-created product places no such premium on planned obsolescence. If people want to give older prod­ucts new life, they can and do. New bits can bring new life to old atoms.

Ford, for one, is already paying attention. In early 2012, it worked with TechShop to bring one of the shared Making facilities to its home city. The Detroit TechShop is huge, at 17,000 square feet, and is stocked with $750,000 worth of laser cutters, Ç-D printers, and CNC machine tools. Ford employees are free to use the space day or night for projects related to their work or personal projects, and Ford intends to give out 2,000 memberships in the first year. Ideas Ford employees have prototyped at the new makerspace, including a method for rocking a car out of snow, a one-way valve to let air out of a car to help with defogging, and a “kick plate” to help get in and

Reinventing the Biggest Factories of All ∣ 135 out of test vehicles. Since the program began, patent submissions at the Companyhave risen 30 percent, something for which its managers credit the TechShop injection of Maker spirit.

This is how industries are reinvented.

Detroit West (again)

You don’t have to imagine what an entire car industry built along these lines might look like—it’s already here. At the former GM/ Toyota NUMMI (New United Motor Manufacturing, Inc.) factory in Fremont, California, Tesla has built the most modern factory in the world. It happens to build cars, but it could build anything. It is not just automated, it’s a veritable robot army. Hundreds of general-purpose KUKA robot arms do everything from metal-bending to assembly. Flat-topped robot vehicles carry car chassis around, charging them­selves on inductive pads as they go. Robot painting arms from Fanuc can open car doors to spray around them, and then close them again when they’re done.

Tesla will be making twenty thousand cars per year at this factory, which may sound like a lot, but still makes it a niche player in the global automotive business. But what’s smallish for cars is still mas­sive for everyone else. The Tesla factory occupies part of a building nearly a mile long. It will employ more than one thousand people. It is already the biggest factory in Silicon Valley. If you’ve seen the movie Iron Man, you’ll have a feel for it. The film’s protagonist, Tony Stark, was modeled after Tesla founder Elon Musk, and the factory looks like nothing more than the movie brought to life.

Part of what makes this factory so innovative is that these are not your regular cars. For a start, the Model S, which the factory will start with, is pure electric, which means that it shares as much with a laptop computer as it does with a traditional gas-powered car. Rather than complicated mechanical components such as an engine, transmission, and drive train, the Tesla cars have lithium-ion battery packs, electric motors, and sophisticated electronics and software. That means that they have a tiny fraction of the number of mechani­cal parts as a traditional car. They’re simpler, and thus easier to build.

On a tour of the factory on its opening night, Gilbert Passin, Tesla’s vice-president for manufacturing, explained that the plant is like a massive CNC machine—it can be configured to make almost anything. The entire factory is programmable and every car can be different. The same plant can make several different models of cars simultaneously with totally different parts, even alternating among them. If Henry Ford pushed standardization and “any color as long as it’s black,” Tesla pushes customization, from the colors of the trim to the number of battery cells in the lithium pack. They can even be road-tested indoors on a special “rumble track” of various bumpy surfaces to detect loose or squeaky fittings, which is right next to the final assembly line. If there are any problems, the people to fix them are right there, something that would be impossible with the emis­sions of internal combustion vehicles.

The Tesla factory operates on a principle of manufacturing “units of one,” closer to the dream of mass customization than any auto­motive manufacturer has ever come. Because so much of the car is made in the factory itself, there is no need for a big inventory of com­ponents or long supply chains and the inflexibility that comes with them. With vertical integration comes total control—it’s the ultimate “just-in-time” process. It fabricates what it needs, when it needs it.

Contrast this with the GM/Toyota factory that previously oc­cupied this space. In 1984, NUMMI was launched as an ambitious effort to bring to American car-making the previous revolution in production efficiency, the Japanese “lean manufacturing” techniques that had been pioneered by Toyota. NUMMI was itself occupying a factory that had failed: GM’s Fremont Assembly site, that had closed two years earlier after twenty years of operation as what was generally considered the worst car factory in America. The GM plant embod­ied everything that had gone wrong in the U.S. manufacturing mode in the 1970s and 80s, from outmoded technology to labor unrest. It

Reinventing the Biggest Factories of All ∣ 137 had it all: union corruption, a workforce that ranged from apathetic to antagonistic, even drug dealing and prostitution in the parking lot.

NUMMI was meant to help reinvent the American car industry, starting from the factory floor. It was, in some sense, the first “brown­field” site. Take a failed factory from the old era, replace as much as you can, and begin again with a totally new way of doing things—a “greenfield” strategy built on the grounds of an existing plant. The Japanese lean manufacturing was mostly about ways to bring workers more into the process, encouraging them to give constant feedback to eliminate waste and reduce errors. The hope was American factory workers could be made as productive as Japanese ones if given a better working environment that allowed them to take ownership of their output and tap their ideas on how to improve processes.

The parallels between then and now are striking. The ambition was the same: flexible, efficient, high-quality manufacturing, using automation to improve quality and just-in-time supply to lower costs and increase flexibility. But the difference is that then, automation meant custom-made automated handlers, each specialized for a single task, since powerful general-purpose robotic arms had not yet been developed.

The first generation of computer-controlled automation was closer to the steam loom than to a robot—it did one thing better than a human, but only one thing. That made it efficient to make one prod­uct, but incredibly hard to change the production process to make an­other. Before GM and Toyota closed the plant in 2009, it was making Toyota Corollas and Tacomas in different parts of the plant. There was a last-ditch proposal to save it by making GM-branded Prius hy­brids there instead, but it was just too hard to change the plant.

Likewise, the NUMMI just-in-time supply model was far bet­ter than the batch-ordering of the traditional Detroit way, but it was still dependent on a long and complicated chain of suppliers, most of which were not based in California. Indeed, if anything killed the plant in the end, it was that the economics of having a plant so far from suppliers in the Midwest made less and less economic sense in an increasingly competitive market. Just-in-time made supply chains better, but they were still supply chains. The more dependent a fac­tory was on parts made elsewhere, the less flexible it could be and the more it was exposed to the risk of disruption and pricing uncertainty. Because it was so dependent on an extended chain of suppliers, much of the factory was devoted to inventory and storing pre-made parts.

Today, the big difference is digital manufacturing. Unlike NUMMΓs custom automation, most of the Tesla robots are stan­dard KUKA machines with light composite arms, six axes of move­ment, and the ability to lift 1,000 kilograms. Not only can they be reprogrammed for different tasks in just minutes, but they typically do dozens of different tasks as part of their regular job. Next to the KUKA arms in the assembly wing of the Tesla plant is a rack of different heads. An arm may start with an aluminum welding head, then switch that out for a bolt-driving head, then switch that out for a gripper, all automatically. Even the robots that simply move sheet metal from one stamper bay to another are KUKA arms. Unlike the custom transport machines they replaced, they use suction cups or other air-pressure graspers to carry material of any size and shape. Tesla’s stamping machines were inherited from NUMMI (adapted to stamp light aluminum rather than the old steel), but the automa­tion that drives them is all new.

So, too, for the supply chain. Musk is a zealot about bring as much fabrication as possible in-house, and he’s got the experience to know how to do it. This is what he did with his rocket company, SpaceX, which is now leading the private space industry. Its basic rocket tech­nology is not much different from what NASA uses, but its produc­tion processes are what allows it to get to orbit at a fraction of the cost. Unlike the complex (and politicized) network of contractors, subcontractors, and sub-subcontractors of NASA’s aerospace industry model, SpaceX makes almost everything itself using digital fabrica­tion tools. Technology allows it to vastly simplify the complexity and bureaucracy of manufacturing, cutting costs by as much as a factor of ten and improving reliability. It doesn’t need to reinvent the physics of space flight to improve on the NASA model; most of the innovation happens on the factory floor.

Tesla aims to do the same thing to the car industry. The old sup­ply chains were based on the classic economic principles of division of labor and Comperative advantage. The company that had the skills and tooling to make transmissions was not the same as the one that could make plastic dashboards or ABS braking software. Each spe­cialized, and the buyers combined them all with supply chains.

This was like the early days of computing. There were special­ized computers for accounting, others for ballistic missile trajecto­ries, and yet others for the census. Then researchers invented the general-purpose computer, and today the PC on your desk can do anything. Each program you run reconfigures the machine for a dif­ferent function. What your mouse does in a Web browser is different from what it does in the Call of Duty videogame. Your computer can be a book, a phone, a television, a newspaper, a plaything, or a secu­rity guard, depending on what software it is running.

Likewise for the robotic factory. General-purpose robots can be reconfigured by software as easily as a PC. By using other general- purpose digital fabrication tools, from powerful laser cutters that create the stamp forms to shape metal to CNC machines that make the molds for plastic, Tesla can do much of what used to be out­sourced to suppliers. By focusing on a product that is itself an out­growth of the computer industry—the electric car, which is more digital than mechanical—the very parts that Tesla makes are recon­figurable. Rather than using a complex mechanical drivetrain, the performance of the Model S comes from software. Rather than a dashboard full of dedicated dials, most of the Tesla displays are on a single multipurpose screen, just like a PC.

What kind of manufacturing future does this allow? One that can let America and other relatively high-cost countries compete. Cheaper foreign competition and outmoded and inflexible labor-intensive pro­duction processes closed NUMML Now robotics are reopening it.

The robots didn’t replace humans in this case. NUMMI was gone and the factory was empty—there were zero jobs here, and every­one had lost. Instead, robots brought life back to a dead plant, and are bringing one thousand new jobs with them. These new jobs are higher-skilled and will pay better than the old ones. Yes, that means many of the workers at the old NUMMI plant will not have the skills to work at the new one, but some will. More to the point, this is a model that can stand up to the economic pressures of globalization and succeed.

Western companies can buy KUKA robots as cheaply as Chinese companies can. The labor component of products such as cars is fall­ing rapidly as automation takes over, making the usual labor arbitrage economics less relevant. The raw materials—plastics, bauxite (alumi­num ore), even lithium—are sold on the global market, and everyone pays more or less the same price. What’s left is the cost of land, elec­tricity, and taxes. Those are still more expensive in the West, but the gap is far narrower than what it was with labor. With the rise of the robotic factory, the multicentury global trade flows toward cheaper workers may be coming to an end.

To be sure, the Tesla factory is a special case. It got what amounts to a huge subsidy in its portion of the old NUMMI plant, which it was able to buy for just $43 million, complete with lots of functioning equipment. As a relatively new car company (it was founded in 2003), it didn’t have to inherit the pension obligations and labor unions of the Detroit giants, nor did it face pressure to preserve jobs rather than au­tomate. There’s the small matter of the half-billion-dollar federal loan it got in 2010. And, let’s face it: it could still fail. It’s trying to break into the car industry with an expensive vehicle using bleeding-edge pure electric technology in a world where even the giants are having trouble getting people to pay extra for decade-old hybrid technology.

But whatever happens to Tesla, its production model will triumph. It simply reflects the direction all advanced manufacturing is going, driven by the power of digital fabrication technology. It’s no coinci­dence that the KUKA robots are made in Germany. Such flexible automation is why manufacturing in Germany, a high-cost country, has been able to thrive in the face of Chinese competition, making it the engine of the European economy. Tesla’s factory is simply the newest to be built on this model, and thus the most innovative. Today it builds cars. But the same model could build anything.

Every few generations, the fundamental means of production is transformed: steam, electricity, standardization, the assembly line, lean manufacturing, and now robotics. Sometimes this comes from management techniques, but the really powerful changes come from new tools. And there is no tool more powerful than the com­puter itself. Rather than just driving the modern factory, the com­puter is becoming the model for it. Infinitely flexible and adaptable, general-purpose industrial robots can be combined to create the uni­versal Making Machine. And like computers, they work at any scale, from the mile-long NUMMI plant to your desktop. That—not just the rise of advanced technology, but also its democratization—is the real revolution.