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Wanted: Manufacturing whizzes to work on Tesla's Model 3

Tesla Chief Executive Elon Musk smiles as he attends a forum on startups in Hong Kong, China January 26, 2016. REUTERS/Bobby Yip/File Photo

By Alexandria Sage

SAN FRANCISCO (Reuters) - Technology entrepreneur Elon Musk gave a public shout-out to the sharpest minds in manufacturing this week, calling on them to come help Tesla Motors Inc build a million all-electric cars a year by 2020.

Musk says he is "hell-bent" on making the Silicon Valley automotive upstart a manufacturing powerhouse, but his vision relies on finding veteran auto engineers to ramp up volume ten-fold in four years - a challenge even for established carmakers.

Tesla on Wednesday said it would build 500,000 cars in 2018, two years ahead of schedule, and close to 1 million by 2020. The same day Tesla said its vice presidents in charge of production and manufacturing were leaving.

"You're looking at a company with significant levels of management turnover at the highest ends, people without experience in the planning, design or build of vehicles, and you expect to crank it up at those kinds of volumes?" asked Michigan-based auto manufacturing consultant Michael Tracy.

Putting aside the issue of capital requirements, auto experts point to a shortage of manufacturing engineers, whose ranks were thinning out even before the U.S. auto crisis hit in 2008.

"It’s a constant issue we have in this country," said Garth Motschenbacher, director of employer relations at Michigan State University's College of Engineering.

"For the longest time manufacturing was seen as the dirty end of engineering," he said.

At the same time, Alphabet's Google and Apple are working on car programs and courting the same potential employees. So are established auto names like Ford Motor Co, General Motors Co and Toyota Motor Corp.

A 2015 Deloitte report found it takes three months to hire skilled engineers, and the shortage is crimping manufacturers.

Robust early reservations for the upcoming Model 3 mass-market car may have assured Musk of demand, but now comes the execution, said automotive recruiter Stephen Parkford.

"It's like reservations for a restaurant that's not open yet. You got the menu, but you don't have a chef!" he said.

Hiring a highly proven production engineer from a traditional carmaker who arrived with his entire team could speed the process, Parkford said.

But while young engineers will jump at the chance to work for Tesla, the "by-the-numbers, disciplined manufacturing guys" with 15-20 years experience will be harder to nab, said Cuneyt Oge, president of the Society of Automotive Engineers. One key obstacle is the high price of living in Silicon Valley.

Musk needs a visionary auto industry veteran, Oge said. "But anyone with that kind of experience is going to say, 'Hey, Elon, you can't do this in two years.'"

Tesla is known for pushing the envelope on design and technology but has stumbled in manufacturing, with prior launches marked by delays and quality issues.

Traditional automakers have more human and financial resources than cash-burning Tesla: Tracy pointed to Nissan Motor Co Ltd's ability in 2004 to bring in 200 engineers from Japan to help fix quality issues at its recently opened assembly plant in Canton, Mississippi.

"Greybeards" are crucial to build and run factory systems, said Oge. "You can't just defy the laws of business physics which require you to go down a learning curve collectively to build that systems know-how," he said.

While Tesla employees may cite Musk's tirelessness and attention to detail, even bedding down inside his Fremont, California factory, others like consultant Tracy see a worrying sign.

"If Elon is sleeping in a sleeping bag in a conference room off of the final assembly line, then there's an awful lot happening in that factory that's wrong," Tracy said.


(Reporting By Alexandria Sage; Editing by Tom Brown)

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