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Tesla's seat strategy goes against the grain...for now

Ersin Çelik
09:56 - 26/10/2017 Perşembe
Update: 09:57 - 26/10/2017 Perşembe
REUTERS
esla Chief Executive Elon Musk introduces one of the first Model 3 cars
esla Chief Executive Elon Musk introduces one of the first Model 3 cars

FROM STOP-GAP TO STRATEGY

Musk has defended Tesla's hands-on approach as the way to ensure reliability, as well as an opportunity to rethink industry norms.

It is also a reflection of the entrepreneur's obsession with detail.

"One of the hardest things to design is a good seat," Musk said at the September 2015 launch of the Model X in Fremont.

Problems first surfaced with the flagship Model S sedan in 2012. Musk complained that the seats made by its contract manufacturer, Australia-based Futuris Group, were not comfortable nor of the quality expected for a car whose price tag started at around $57,400, according to a former Tesla executive who described Musk's thinking to Reuters.

Troubles accelerated with the Model X, leading Tesla to wrest assembly from Futuris just after the vehicle's release in late 2015. If seats could be entirely redesigned from the ground up, Musk reasoned, maybe their assembly could be automated in preparation for the high volumes anticipated for the Model 3.

"He saw the opportunity to do it differently and better," the former Tesla executive said. "The short term was a stop gap, but the long-term idea was to rethink the design of how a seat works to include how a seat is built."

Futuris did not respond to requests for comment. It continues to supply seat parts to Tesla. Detroit-based seating supplier Adient PLC acquired Futuris for $360 million last month. Meanwhile, Tesla's seat woes continue. In all, the automaker has issued four seating-related recalls since 2013. The latest came this month with the recall of 11,000 Model Xs manufactured between Oct. 28, 2016 and Aug. 16, 2017.

SUPPLIERS CIRCLING

Making car seats is a complex business. Choosing materials, dying and cutting, shaping foam and metal frames, and adding heaters, recliners and other gadgets can involve nearly a dozen suppliers for top models. Final assembly requires lots of labor.

That's why most automakers opted decades ago to outsource seats for their lower-cost models to specialty seatmakers whose market is expected to reach $79 billion by 2022, according to market researcher Lucintel.

Although Musk's philosophy has always been "build it right and then figure out how to get the cost down" later, according to the ex-Tesla executive, observers say Tesla can ill afford more production headaches.

Philippe Houchois, an auto analyst with the investment bank Jefferies, wrote in a September note to clients that "scalability" was now the main challenge at Tesla, whose manufacturing prowess is still unproven when it comes to building large numbers of vehicles.

"We don't think Tesla's vertically integrated business model can be scaled up as profitably and quickly as consensus thinks," Houchois wrote.

Despite Tesla's previous battles with Futuris, seat suppliers smell opportunity. ZF Friedrichshafen and Faurecia have opened Silicon Valley labs, in part to woo Tesla.

Lear, which cuts and sews material for Tesla, is likewise pressing to get the automaker's seat manufacturing business, according to Matthew Simoncini, the company's chief executive.

"In general Tesla has a philosophy: 'We'll do it ourselves. We'll change the mold,'" Simoncini said. "(Outsourcing)is a much more efficient use of capital. That would allow them to focus on what they do best."

#Tesla
#Elon Musk
6 yıl önce
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