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Tesla buys german manufacturing know-how

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  • Tesla buys german manufacturing know-how

    Tesla has invested quite a bit of dollars to buy the german engineering company Grohmann, a family-owned business located in the western town of Prm, close to the borders with Belgium, France and Luxembourg, and pledged to add around 1000 high-skill jobs there. Grohmann is in spite of its comparatively small size ( around 700 employees) considered to be one of the leading makers of manufacturing machines in the world and Tesla explicitly expects the purchase to improve speed, quality and cost of production of its vehicles. The deal could still be derailed by the german ministry of economics though. In the case of chinese investors trying to take over a german maker of industry robots they vetoed the deal, with Tesla that is not expected though. Especially since the US company appears to have pledged not only to leave production in Germany, but also to expand and heavily invest in it :

  • #2
    That would be an easy fit for Tesla. They basically opened up their battery patent recently, hoping other parties would improve on their idea. Clearly, they believe they are far enough ahead in production and marketing to loosen up access to their technology. Since companies will gladly come to them with their own innovations, and both will benefit, they will leave as much of Grohmann company's structure intact as possible.

    Then there is the fact that Germany made an open statement recently, to accelerate policy and planning, with the objective of replacing their automobile fleet with electric powered vehicles by 2030. A few questions remain, (fe) will Grohmann be able to contract out with others, supposing they come thru on engineering innovations that apply to all electric passenger autos? Were I running Tesla, I would cautiously go in that direction, perhaps delaying release of important innovations by a few months. That environment, German auto companies eventually catching up to Tesla, all companies able to use innovations for the basic design, all of them leading the world in transition to electric vehicles.

    The US gov't. would do well to keep a close eye on Tesla. It would be a mistake to let them relocate to another country, without first trying to convince them to keep most of their operations here.


    • #3
      Originally posted by radcentr View Post
      That would be an easy fit for Tesla. They basically opened up their battery patent recently, hoping other parties would improve on their idea. Clearly, they believe they are far enough ahead in production and marketing to loosen up access to their technology. Since companies will gladly come to them with their own innovations, and both will benefit, they will leave as much of Grohmann company's structure intact as possible.

      Then there is the fact that Germany made an open statement recently, to accelerate policy and planning, with the objective of replacing their automobile fleet with electric powered vehicles by 2030. A few questions remain, (fe) will Grohmann be able to contract out with others, supposing they come thru on engineering innovations that apply to all electric passenger autos? Were I running Tesla, I would cautiously go in that direction, perhaps delaying release of important innovations by a few months. That environment, German auto companies eventually catching up to Tesla, all companies able to use innovations for the basic design, all of them leading the world in transition to electric vehicles.

      The US gov't. would do well to keep a close eye on Tesla. It would be a mistake to let them relocate to another country, without first trying to convince them to keep most of their operations here.

      Well, getting into the german market is a necessity as well as a risk for Tesla. On the one hand they have strong and well-established local competition that have already E-cars on the market as well ( BMW f.e. ). On the other hand no other high-tech economy invests as much and long-term in "green-tech" innovation, including E- cars as Germany. The governement has also just launched a subsidy program for purchasers of electric cars, as well as another to create a nationwide network of battery recharging stations for E-cars ( which is one of the main problems for E-mobility outside big cities) and obviously Tesla seeks to profit from that. Getting Grohmann on board not only helps to increase Teslas technological clout in general as a company, it also helps increase knowledge of the local market ( and Tesla has announced to rapidly expand Grohmann). Competing with Audi, BMW, Volkswagen, Daimler etc. on their homemarket is quite a gamble , but it looks interesting. And with a rather not so environmentally friendly administration on the horizon in the US it might be the right time for a company like Tesla to invest in operations in Europe. By the way : Also GM has a german subsidiary : Opel.


      • #4
        The next administration might well inspire Tesla to move much of their operations to Germany and other parts of the EU. Not that we would go back to coal-fired automobiles (the worst of the "steam" powered vehicles). At least, I hope not, although Trump has expressed high praise for coal as cheap energy.

        It is difficult to get a decent read on Trump. He has demonstrated flexibility in some business decisions, but the presidency is another world. He might remain rigid on carbon based fuel because it is the established energy source, or the elites producing it are GOP supporters. Add to that, most of it can be produced domestically. It doesn't matter, unless the GOP also negotiates tariffs on EU automobiles. When the E-car can be marketed in the US starting at $15-16,000, with a range of at least 300 miles, and a recharge time of 45 minutes or less, then it is game over for the gas stations. Marketing will do most of the work: The average consumer immediately knows what kind of savings are involved when comparing the cost of a recharge, vs. filling the tank with gasoline. Comparisons -even now- put a recharge at the gas equivalent of 120 miles per gallon. The internal combustion engine is very near it's maximum efficiency, which means it is very near the end of it's usefulness as a passenger car. The major impediment -beyond political posturing- is cost for the E-car, as I understand range and recharge time are nearing required standards.


        • #5
          There are rumours in the german press about Tesla planning a "gigafactory" in the country. And that this was why the economics ministry in Berlin, that is rather picky about foreign companies buying up local ones, had voiced no known objections to the Grohmann purchase. Prm, where Tesla Grohmann Automotive works will be based, would also make perfect sense as location. Strategically on Germanys western edge, with short distances to France and the Benelux countries, but also the Rhineland. Excellent road connections, wide open space available and a potentially cooperative state governement with participation of the Greens, that wouldnt mind a company like that to settle in their state. Germany is not cheap, neither in salaries nor in taxes, but it offers as a plus plenty of brillantly trained engineers and technicians ( usually english-speaking), and that might be more important than cheap labour for Tesla. The main issue for them will be the local competition like BMW. That already have E-cars on the market that sell rather sucessfully, that have experience in mass manufacturing them, and then, when in doubt, Germans are more likely to buy local than not ( I am also thinking of getting an E-car next time I am looking for one. Wether it will be an american brand, I wouldnt confirm yet though ) . On the other hand the market looks set to grow massively anyway ( one more factor is that distances are relatively small compared to the US, which means it is far easier to develop networks of recharge stations). Which might give Tesla some time to adapt and to figure how to beat the local competitors offers. Well, competition is healthy and good luck to them. But it will be hard.


          • #6
            Tesla is no stranger to hard work. They have chosen well, and I hope their choice will make them a world player in E-car manufacture and marketing. Even if they stay in the "high end" price market, their work (along with their German competitors) will transfer to the lower income customers.

            The big test in the US will be the desert southwest and western basin zones. Lots of open, unpopulated stretches of road. Successfully test a smaller power plant that makes it to the few recharge spots on those roads, in (almost) any weather, for a modest purchase price. That test will signal the true end of the internal combustion engine, as the dominant model thruout the world.


            • #7
              Considering that the future is a combination of highly automated manufacturing systems such as these, or far smaller and local micro factories, anyone promising or expecting vast amounts of blue work to return is on very shaky ground.

              Tesla has said they would need hundreds of "gigafactories" to spread their all electric transportation ecosystem worldwide, their subsidiary, SolarCity, is already building the Solar Panel equivalent, with lots of state subsidies, in Buffalo. Combine that with the fact that moving manufactured goods around is considered a faux pas by the environmentally minded, there is no reason to think that such facilities will not be evenly spread around.

              Speaking of infrastructure, if Darth Combover wants to use infrastructure as an effective tool of economic change, one solid idea is the solar roadway. No matter how much the electrical engineers try to throw a wet blanket (it's their secret weapon) on the idea because the panels technically don't capture as much juice as when they are on the roof without textured glass, the combination of a roadway generating power while simultaneously transmitting it via inductive charging to passing traffic will fundamentally change transportation as we know it. It would mean effectively infinite, emissions free range. This would be a far cry from other bubble inducing infrastructure initiatives that only serve to keep the politically connected employed.


              • #8
                I've seen information on the solar "paving stones" technology. The best idea for this transportation paradigm. Hopefully, the "plug in", battery-operated E-car is only a transitional stage.

                Politically correct will always play the gov't. part. In this case, the range of parties left to right will play the "domestic source" game. As well they should. Manufacturers will (and should be) less inclined to build megafactories, if they can find labor and other resources in a given region. As they automate, blue collar employment becomes less likely, anyway. The jobs that remain will be valuable, but the numbers won't add up to huge gains (or opportunities for corruption) for the politicians. Another positive outcome.


                • #9
                  Article is from June, but just today Daimler CEO Dieter Zetsche has re-confirmed that his company is heavily investing in E-mobility and will speed up industrial production to early next year. He made these remarks as a guest on the national Party convention of the Greens ( that were until a few years not so likely to welcome him ) But then again also Daimlers home state Baden- Wrtemberg is governed by the Greens without leading to the carmakers pullout. A connection to Teslas engagement in Germany was not confirmed, but is considered likely :