OM in the News: America’s Newest Auto Plant Is Full of Robots

Hyundai uses robotic dogs in assembly lines

At Hyundai Motor Group’s ultramodern new auto plant, robots perform a stunning array of tasks. They move materials, attach doors and do almost all of the welding. Dog-like robots, their snouts laden with cameras, prance across the floor to inspect partially built Ioniq electric vehicles.

The factory, which opened near Savannah, Ga., late last year, deploys 750 robots, not counting the hundreds of autonomous guided vehicles that glide across the floor. About 1,450 people work alongside them. That roughly 2-to-1 ratio of humans to robots compares with the U.S. auto-industry average of 7-to-1, writes The Wall Street Journal (Aug. 25, 2025).

The human workforce is sparse in much of Hyundai’s plant. Metal arms move slabs of steel through presses that stamp them into components of the frame. An array of robots weld those parts together without a person in sight.

Human beings are still in the driver’s seat for some jobs. But it isn’t until the frames emerge from the paint shop that people take over. Hundreds are stationed along two assembly lines where seats, dashboards and other components are added. They spot burrs that must be smoothed and bits of trim that need replacing. They snap fabric door panels into place with grommets, push electrical connectors together until they click and duck into places robots can’t reach to bolt down seats and attach shock absorbers.

The factory was designed so that robots do tasks that are dangerous, repetitive or physically demanding. People are left to troubleshoot, monitor quality and bring craftsmanship to the manufacturing process. “We’re not trying to minimize human involvement—we’re trying to maximize human potential,” said the CEO.

“But the minute humans become more expensive, more recalcitrant, the more automation you’re going to get,” said an industry expert. The auto industry today is heavily robotized, particularly in Hyundai’s home country of South Korea. The country has one of the world’s lowest birthrates, helping to drive its adoption of the machines.

A complete robot takeover is decades away. Robots still struggle to handle fabric and other limp materials, and performing the most complex jobs will take technological breakthroughs that aren’t yet on the radar.

Classroom discussion questions:

  1. Will robots ever take over 100% in auto manufacturing?
  2. What are the OM implications of the 2 to 1 ratio?

OM in the News: Chip Shortages are Still Hurting Auto Makers

Auto makers globally have been grappling with a shortage of semiconductors since late 2020, when a rebound in auto sales took companies by surprise after they had previously moved to reduce chip orders. Auto makers competed for limited supply against electronics companies like Apple and Dell that saw demand bolstered by stay-at-home consumers.

That demand has now eased, and smartphone sales are falling. The car market, meanwhile, has remained relatively strong and Toyota, the world’s biggest auto maker, says it still can’t get its hands on enough chips. Toyota is trimming this year’s production by 500,000 vehicles because of the shortage.

The situation reflects prolonged underinvestment in certain older types of chips that are particularly needed by car makers, writes The Wall Street Journal (Nov. 2, 2022). While slowing demand for smartphones and personal computers has eased shortages of memory and other chips and sparked fears of a glut, pockets of constrained supply remain. Analysts and chip executives say the supply-demand mismatch could drag on for years, that the auto industry isn’t yet near the end of its problems, and some might even worsen.

The problems particularly involve analog chips, which use older technology processing information with gradations, unlike digital chips that differentiate only between on and off signals. Other auto makers beside Toyota have also said they are grappling with a tight supply of legacy chips. Cars use hundreds of analog semiconductors for purposes such as moderating how much power is drawn from a battery, yet new investment has largely been funneled into developing more advanced chips.

Due to the nature of vehicles today, even if it’s just one type of semiconductor that’s in short supply, a car can’t be built. Toyota said it would temporarily give buyers of some models in Japan one smart key instead of two to help ration supplies.

Classroom discussion questions:

  1. What options do auto industry operations managers have when faced with a chip shortage?
  2. Why is there still a semiconductor shortage?

Good OM Reading: Power Play–Tesla, Elon Musk, and the Bet of the Century

Tesla has earned a prominent place in auto history under the genius of Elon Musk. While the rest of the auto industry sought to protect its internal-combustion business under the assumption few people would buy an alternative, Musk showed that stylish, fast and fun electric cars would prove popular.

Musk’s approach to many manufacturing issues was, and is, keeping the assembly line moving while line problems are being fixed. He’s not a fan of the Toyota method, where a worker can stop the line until the problem is solved. He’s about volume. That may be one reason why the quality of Teslas is so variable. Some owners report their car is perfect; some say they were sold a piece of junk.

In 2016, Musk promised that a self-driving car, a Tesla semi truck and a new, possibly jet-powered roadster were imminent. None are remotely close to production. Since Tesla was founded in 2003, it has undergone a truly hellish 15 years, beset by rivals, pressured by investors, hobbled by whistleblowers, but lauded by its loyal supporters. Musk himself would often prove Tesla’s worst enemy.

Building the Teslas proved much harder than Musk expected, resulting in a” would-he or-wouldn’t-he” drama in 2018 to reach a weekly production level of 5,000 Model 3 cars—the volume needed to make the company sustainable. Problem after problem resulted in money-eating delays that left the Tesla and its employees badly shaken. Musk, often sleeping in the Fremont, California, factory, had dubbed it “Manufacturing Hell.”

Wall Street Journal reporter Tim Higgins had a front-row seat for the drama: the pileups, wrestling for control, meltdowns, and the success. His new book, Power Play, is an exciting tale that deals with a myriad of OM issues. You and your operations management students will find much worth discussing in class after reading Higgins’ book.

OM in the News: Putting the Brakes on JIT

Toyota is stockpiling 4 months of some parts. Volkswagen is building 6 factories so it can get its own batteries. And Tesla is trying to lock up access to raw materials.

The hyperefficient auto supply chain symbolized by “just in time” is undergoing its biggest transformation in half a century, accelerated by the troubles car makers have suffered during the pandemic, reports The Wall Street Journal (May 4, 2021). After sudden swings in demand, freak weather and a series of accidents, they are reassessing their basic assumption that they could always get the parts they needed when they needed them.

“The JIT model is designed for supply-chain efficiencies and economies of scale,” says Nissan’s CEO. “The repercussions of an unprecedented crisis like Covid highlight the fragility of our supply-chain model.”

Ford F150
New Ford F-150 pickup trucks–unable to be sold because of the global shortage of semiconductor chips

The basic idea of JIT, as we explain in Chapter 16, is avoiding waste. By having suppliers deliver parts to the assembly line shortly before they go into a vehicle, auto makers don’t pay for what they don’t use. They save on warehouses and the people to manage them. But as supply chains get more global the system has grown brittle. The crises are more frequent.

Auto makers don’t want to replace JIT entirely, because the savings are too great. But they are moving to undo it to some degree, focusing on areas of greatest vulnerability such as irreplaceable semiconductors. Ironically, Toyota now asks its suppliers to stockpile parts, the antithesis of JIT. After the 2011 earthquake in Japan hit many Toyota suppliers, the company pushed them to disclose who sells them their components. Over time, Toyota built a database that covers 400,000 items and reaches as far as 10 tiers down.

A sister idea to JIT was the use of single suppliers for many parts. These suppliers could master the daily dance of deliveries, cut costs through volume and service the global factory networks that the top car makers operate. Chrysler buys about 400,000 parts for the 100 models in its lineup of brands– and 95% of those parts come from a single source.

Classroom discussion questions:

  1. What are the advantages and disadvantages of JIT in the auto industry?
  2. Why did Toyota develop such a deep-tiered database of suppliers?

Video Tip: Global Auto Production by Country

In this animated 6-minute infographic, we see the history of global auto industry competition from 1950 to 2019, spelling out the winners and the losers. As the moving bar graph clocks through the years and nations, we have these observations:

+  In global auto production, Japan surpassed the U.S. in 1975, earlier than many may remember. But, the U.S. retook the number 1 spot in 1995 and held it until 2006, when China swept past both countries to claim the top spot and the U.S. slipped back to second.

+   In 1957, twelve years after the end of World War II, Germany overtook the U.K. for second place, albeit a distant second with 1.5 million vehicles produced versus nearly 8 million for the U.S.

+  China did not enter the top 10 until 1998, but then it  quickly leapfrogged through the standings, taking the top slot in 2008 at 12 million units. Today, China is by far the world’s most prolific auto producer with more than 27 million cars, trucks, and buses built in 2019, 2.4 times as many as the U.S., the next largest producer. Note that Mexico is making an impressive rise in recent years.

The major automakers of today are multinational corporations with numerous international joint ventures, so the auto industry of the 21st century is a small, but a complicated world. This is an excellent video to show when discussing Global Operations Strategy Options in Chapter 2 of your Heizer/Render/Munson text.

What patterns can your students point out?

OM in the News: Mexico’s Shutdown Snags U.S. Factories

Whirlpool has said some of its suppliers in Mexico haven’t secured permission to remain open. A Whirlpool facility in Monterrey, Mexico.

Mexico exported $358 billion worth of goods to the U.S. last year, surpassing China as the nation’s largest trading partner. But many subsidiaries and suppliers of parts or finished goods to U.S. manufacturers remain closed by the order of Mexico’s Health Ministry, limiting the flow of goods back north across the border. So U.S. manufacturers preparing to resume production after a month of lockdowns are returning to work without a reliable supply of parts from plants in Mexico. The supply strains are adding to the uncertainty for manufacturers navigating one of the steepest drops in demand for their products in decades, writes The Wall Street Journal (May 6, 2020). 

Mexico’s lockdown covers entire industries that remain in operation in the U.S. or are planning to resume production, including the auto industry. Repairing the frayed supply chains will be an early test for the revised version of a free-trade agreement between the U.S., Mexico and Canada, which is set to take effect in July. The pact, like many trade treaties, lacks standard definitions for essential industries that would remain open during a crisis that affects all three countries such as the coronavirus pandemic.

U.S. companies and some states have been lobbying for Mexican plants near the border to reopen, raising tensions between border towns where manufacturing and trade are tightly linked. Mexican authorities have cited border factories for contributing to higher rates of infection in northern Mexico. Public health authorities there say the trajectory of the pandemic in Mexico is behind the U.S., requiring that more businesses there remain closed. Tijuana, just across the border from San Diego, has been one of Mexico’s most infected areas.

Classroom discussion questions:

  1. Explain why maquiladoras (see Ch. 2 in your Heizer/Render/Munson text) are important parts of U.S. supply chains.
  2.  Besides coronavirus, what other risks do supply chains face? (Hint: see Table 11.3)

OM in the News: The Virus and Global Auto Supply Chains

The coronavirus outbreak, which has all but sealed off China’s Hubei province from the rest of the world, could have an outsize impact on the global auto industry, which has a large footprint in the region in central China. reports The Wall Street Journal (Feb. 2, 2020). The virus’s spread has disrupted car manufacturing in China and prompted major auto companies with operations there to restrict travel and ask employees to stay home. One German auto supplier said that at least 5 employees had been infected.

The Chinese auto industry has grown from virtually nothing 30 years ago to become the world’s largest market for new vehicles. Wuhan, Hubei’s capital, has in that period emerged as an auto-making hub, home to state-owned Chinese Dongfeng Motor and numerous assembly plants for Honda., Peugot, and GM. Auto makers in Wuhan were expected to produce 1.6 million vehicles this year, contributing 6% of overall Chinese output.

Honda said it wasn’t sure when its 3 vehicle plants in Wuhan would reopen in light of the epidemic. These factories can build 600,000 vehicles/year–half of Honda’s total capacity in China. Webasto, a German auto-parts supplier, stated that four employees in Germany had contracted the virus after an employee from China visited headquarters. Bosch, the world’s biggest auto components supplier, warned that coronavirus could impact its global supply chain, which is heavily dependent on China. (Bosch relies on China for exporting electric motors, transmission and power electronics for electric cars).

The virus’ impact is not only on production and distribution of vehicles in China, but has major implications on global supply chains in other manufacturing arenas. Foxconn said it would keep its Chinese factories closed until mid-February. The move could affect global supply chains for tech companies that rely on Foxconn to manufacture everything from Apple’s iPhones to flat-screen TVs and laptops.

Classroom discussion questions:

  1. Might this disease have a lasting impact on global supply chains?
  2.  What other industries are being affected in the US?

OM in the News: Toyota Remakes Its Biggest Plant

Toyota’s largest plant in the world sits on 1,300 acres in rural Kentucky. With floor space equal to 170 football fields, the Georgetown factory houses more than 2,000 industrial robots, 6 cafeterias, and 2 paint shops. Its newest order of business has been to add the gas-electric hybrid version of the popular RAV-4 SUV to one of the plant’s three assembly lines, writes Businessweek (Oct. 7, 2019).

Georgetown is fighting to hold on to its status as Toyota’s biggest plant as demand for its sedans has plummeted and the 3-decade-old factory deals with high fixed costs, falling productivity, and the rise of a network of sibling plants in North America churning out more popular crossovers, SUVs, and trucks. When the factory opened, it was designed to assemble hundreds of thousands of mass-market vehicles, such as the midsize Camry. For 27 years that was Toyota’s bestselling car in America.

An AGV rolls down the Camry assembly line.

The Georgetown plant’s output peaked at 514,590 vehicles in 2007, just before the Great Recession. Americans’ appetite for sedans didn’t keep pace with a recovery in auto demand over the past decade. In 2018, Georgetown’s production totaled 430,224 cars, a sign of rapidly changing auto tastes. That meant investing $238 million more in Kentucky to add the RAV4 hybrid, bringing Toyota’s total investment in the plant to $7 billion.

Georgetown’s ebbing fortunes have increased pressure to cut costs and boost efficiency: it is now less expensive to build a Camry in Japan and ship it to Kentucky than to manufacture one locally. Kentucky is installing advanced flaw-detecting cameras, self-driving supply carts, and systems for sequencing component delivery so fewer parts need to be stored on the factory floor. That will require fewer workers doing manual tasks and will boost efficiency in line with newer factories. Toyota also is reconfiguring equipment to match its most flexible factories in Japan, which make a half-dozen different models on the same assembly line. So one of the big things that is changing is the plant layout.

Classroom discussion  questions:

  1. Why is plant capacity a vital issue here?
  2.  What changes have negatively impacted the plant’s success?

OM in the News: Fiat Chrysler to Open New Factory in Detroit

Fiat Chrysler plans to open a new vehicle factory in Detroit, the first new U.S. assembly plant to be built by a major domestic car maker in at least a decade, reports The Wall Street Journal (Dec. 7, 2018). The Italian-American auto maker plans to make an SUV at the new factory as part of its efforts to expand its iconic Jeep brand. The firm will roll out more truck and SUV models as it responds to a sharp consumer shift away from passenger cars.

The move comes as GM has upset lawmakers about its plans to end production at assembly plants in Ohio and Michigan. President Trump and other elected officials also have blasted GM for the cuts, which will result in up to 6,700 factory layoffs and 8,100 salaried workers layoffs.

The factories GM plans to idle are making slow-selling sedan lines. Fiat Chrysler, which eliminated nearly all of its car lines a year ago, has much less empty factory space in the U.S. Many of its truck and SUV plants operate around the clock making popular models like the Jeep Wrangler and Cherokee, and its Ram truck. Fiat Chrysler has continued to max out its existing factory space. The auto maker’s plant utilization—a measure of its output versus its production limit—is 92%. That is far higher than the 81% rate at Ford and 72% at GM.

Assembly plants are typically major employers, hiring several thousand workers on multiple shifts, and can take up to two years to construct and cost about $1 billion.

Classroom discussion questions:

  1. What major trends are taking place in the auto industry?
  2. Why is plant utilization important?

OM in the News: Auto Makers Plan to Shift More Manufacturing to North America

Some vehicles assembled in North America use engines or transmissions from outside the region. (Source of engine in gray, transmission in red).

Foreign car makers are considering moving more of their manufacturing to North America following the recent U.S. trade deal with Canada and Mexico, writes The Wall Street Journal (Oct. 8, 2018). As the U.S. and Canada reach a pact to replace the roughly 25-year-old North American Free Trade Agreement, foreign car makers suggest changes to their supply chains that would result in more auto-parts manufacturing in the U.S., Canada and Mexico.

Daimler said the new agreement could force the company to move more engine manufacturing to the U.S., where it builds vehicles at a factory in Tuscaloosa, Ala. The Renault-Nissan-Mitsubishi alliance said the new pact would spur the car-making group to invest more in both the U.S. and Mexico.

The deal, which replaces Nafta, requires auto makers to build at least 75% of a car’s value in North America to remain duty-free within the region, up from 62.5% currently. Cars that don’t comply with the new rules will be subject to a 2.5% tariff. (Foreign-based car brands made up 56% of light-vehicle sales in the U.S. last year.)

The new rules will be phased in over the next 2-5 years, about the time it takes to develop a partially or fully revised car model. Car makers are likely to look at moving engine and transmission production first, because those parts make up roughly 30% of a car’s value.

Classroom discussion questions:
1. What is the significance of the graphic on the left? (Click to blow it up).

2. What will be the impact on domestic car manufacturers?

OM in the News: Tesla’s Lean Problems

A recent report in Industry Week (Sept. 12, 2018) suggests that Tesla, like a lot of facilities, has trouble being lean.  Here are a few observations from industry experts who visited the Fremont manufacturing plant.

From a Lean Enterprise Institute advisor: “High, leaning stacks of cardboard boxes and other items make it difficult to see. There was stuff piled up on the floor, and the stuff was dirty. There were fork lifts—I haven’t seen these in an assembly floor in a long time. Most of the AGVs  were empty. The aisles were narrow and crowded, and some of the stuff, piled up, was leaning into the aisle. Rear doors are on the Model 3 body going down the main assembly line, while the front doors aren’t.  In most of the plants I’ve been in, all four doors are off while it’s going through the main interior assembly so the workers can get better access, and the doors don’t get damaged.”

From the CEO of the Center for Automotive Research: “The low production numbers, with the number of workers and the size of the facility, indicates inefficiencies where the manufacturing team is doing a lot of manual work instead of optimizing the production process. The fact that the entire outdoor area—a collection of tents—is set up for rework says they’re having fundamental issues with quality.”

From a manufacturing technology consultant: “They first focused very much on high levels of robotics and automation, only to realize how difficult it was, and now they’re scaling back. So they wasted time ramping up and going back so they could get to the levels of automation that they thought they could. It’s very likely that someone with real, deep manufacturing experience could have realized it early enough.”

Classroom discussion questions:

  1. Why do you think Tesla is facing such production problems?
  2. There have also been reports of multiple paint room fires and a higher than average number of safety incidents. How can OM help resolve such issues?

 

OM in the News: Honda Learns to Outsource

The Honda Civic production line at a factory in Wuhan, China

Honda’s decision to go shopping points to a radical culture change at one of Japan’s proudest companies, where founder Soichiro Honda in the 1960s said, “We refuse to depend on anyone else.” The struggle at the entrepreneurial success story cuts deep into Japan’s sense of itself as a global leader in technology, writes The Wall Street Journal (Aug.6, 2018). Honda once used staff technicians to design new technologies ranging from engines to the shape of the suspension arms. Today, Honda believes rapid shifts in technology mean it can no longer afford to keep pace working solely on its own.

Car makers around the world are under stress from the huge investments needed to develop new technologies used in electric vehicles and autonomous driving. To trim costs, most are leaning on megasuppliers such as Bosch, Continental AG and Denso, as well as smaller companies with cutting-edge technology such as Intel’s Israeli subsidiary Mobileye. For Honda, whose official name translates as Honda Technical Research Industry, the shift to outsourcing is forcing it to rethink its identity as a creator of unique auto technologies. Some of its most famous products include a navigation system that pre-dated civilian use of GPS, and the CVCC engine, which used less fuel and cut emissions. At the time of the engine’s unveiling in 1972, Honda’s head of research, trumpeted: “We at Honda did everything on our own.”

But in a demonstration for journalists last summer, Honda’s self-driving prototype rolled through a stop sign without halting. Honda said the vehicle was an early prototype and that its performance is now much improved as a result of collaboration with SenseTime. Honda’s eventual self-driving system will likely have only a fraction of its software written by Honda engineers. “We haven’t changed. What changed is that it is inefficient for Honda to do everything ourselves,” says a company exec.

Classroom discussion questions:

  1. What was the advantage of doing “everything on our own”?
  2. What are the advantages of outsourcing?

OM in the News: Tesla’s Changing Assembly Line

The Model 3’s third assembly line, under a tent.

Just outside Tesla’s sprawling electric-car Fremont, Calif. plant, an unusual structure has taken shape in the past few weeks: a tent, about 50 feet high and several hundred feet long. Its purpose is as notable as its hasty construction, writes The New York Times (July 1, 2018). The tent houses a 3rd assembly line — part of a desperate effort to speed up production of the Model 3. Just 2 years ago, Tesla envisioned 2018 as a breakthrough moment.  With a high-speed, high-tech assembly process, the company’s sales would soar more than fivefold, to half a million vehicles. It hasn’t turned out that way. As CEO Elon Musk said: “the company faced a prolonged period of manufacturing hell.”

Tesla has raced to iron out kinks in the assembly process, mainly by scrapping some complicated robots that proved ill-suited to certain tasks and hiring hundreds of workers to replace them. On the factory floor, it’s a frantic race that has taken a toll on some employees. Trying to break with standard auto-industry practices, Tesla is searching for ways to shorten the time that robots take to weld parts. It is even making seats, a component most car companies leave to specialized suppliers. And it is doing this while trying to root out bottlenecks and glitches in the manufacturing process.

Established car companies master the process with assembly-line workers and then find ways for machines to take over some of the work. Tesla did the opposite. It designed a highly automated production line populated by over 1,000 robots. But the most efficient lines use a lot of manual labor. “The most automated ones are at the bottom of the list,” said one industry expert.

Adding a new assembly line, even temporarily, is a rare and risky move in the auto industry. A line set up hastily, in an untested environment, might not achieve the quality Tesla promises. The first step in auto quality is stability.

Classroom discussion questions:

  1. What do you think is the impact on the workers on the Model 3 lines?
  2. What did Tesla do wrong?

 

OM in the News: Tesla Suspends Production (Again)

Tesla is temporarily suspending production of the Model 3 sedan for at least the second time in 2 months, just after Elon Musk admitted to mistakes that hindered his most important car. The company informed employees that the pause will last 4-5 days. The hiatus is another setback for the first model Musk has tried to mass manufacture, writes New Equipment Digest (April 17, 2018). In addition to trying to bring electric vehicles to the mainstream, Tesla had sought to build a competitive advantage over established automakers by installing more robots to quickly produce vehicles. Last week, Musk acknowledged “excessive” automation at Tesla was a mistake.

“Traditional automakers adjust bottlenecks on the fly during a launch,” said an industry analyst. “This is totally out of the ordinary.” The shutdown is taking place a week after Musk gave CBS This Morning a tour of Tesla’s assembly plant and said the company should be able to sustain producing 2,000 Model 3 sedans a week. He said manufacturing issues that had been crimping output were being resolved and that Tesla probably will make three or four times as many of the cars in the second quarter.

Tesla built 9,766 Model 3 sedans in the first quarter. The company said in an April 3 statement that the process of boosting production and addressing bottlenecks during the first three months of the year included “several short factory shutdowns to upgrade equipment.” But shutting down for days on end during ramp is far from normal.

Getting Model 3 output up to speed is crucial to generating revenue after the billions of dollars Tesla has spent to manufacture, recharge, service and repair more cars.

Classroom discussion questions:

  1. What is the problem with shutting the factory for 4-5 days?
  2. How does Tesla differ from a traditional auto manufacturer?

 

OM in the News: Tesla’s Sloooow Rollout


Tesla charging stations wait to be unwrapped.

When Elon Musk first unveiled the Tesla Model 3 sedan in March 2016, consumers stood in long lines at showrooms to place $1,000 deposits, giving Musk an iPhone moment unprecedented in the auto industry. When people stand in line at an Apple Store, they typically walk away with a new phone; the all-electric Model 3 had yet to be built. Overwhelming demand inspired Musk to announce in May 2016 that he was advancing Tesla’s production plans by 2 years.  It would build 500,000 total cars annually by the end of 2018, rather than 2020—a fivefold production boost in just 2 years. For Tesla, which had no experience manufacturing cars in high volume, it has been a steep production learning curve, writes Businessweek (Jan. 15, 2018).

Tesla delivered only 1,770 Model 3 sedans to buyers in 2017’s second half. In August, Tesla said it expected to achieve a manufacturing rate of 5,000 Model 3 vehicles a week by the end of the year. In November the company back pedaled, saying it would hit 5,000 units a week in late March 2018, citing “production bottlenecks.” Musk stated he was on the “front lines” of production hell.

“They vastly underestimated how challenging it is to mass-produce vehicles, and quality should be their focus,” said one industry exec. On Jan. 3, Tesla delayed the production goal by yet another quarter, saying that it now expects to hit 5,000 units a week by the end of June, with a “focus on quality and efficiency rather than simply pushing for the highest possible volume in the shortest period of time.” Concentrating on quality makes sense for the carmaker. A mass-recall would probably be far more damaging.

(Tesla’s stock, by the way, surged 43% in 2017, despite the factory setbacks).

Classroom discussion questions:

  1. What are the OM issues that Tesla is facing?
  2. Do a quick SWOT analysis on Tesla.