The Model 3’s record sales were just a harbinger for the coming bloody turf war in the auto industry. China’s mysterious Faraday Futures just poached a key BMW team. And when I say key. I mean it.
The BMW i3 was the only team working on something that will make Elon Musk’s blood run cold. An innovative manufacturing model that could put them years ahead of the competition. Lighter, more flexible, the list goes on.
To get perspective, let’s take a quick look at what Tesla’s doing first. Tesla moved into a Toyota factory. Why? Because, like all current cars except for the i3, their production process is very similar (100 years old).
Large investments, huge machines, plenty of chemical baths, robots that are so large they look menacing. In a nutshell, sheet metal, stamped, welded, painted, Think huge investment. Very little flexibility. Thousands of cars a day from one production line. Very little ability to alter the basic structure.
Basic carbon fiber process: injection of resin, under heat creates immense strength and rigidity. Aluminum frame with the beams connected by a cross beam. Separation of chassis and coach.
Think of the i3 as the car version of the Boeing 787. Modular. 3D printable. This isn’t a perfect analogy but think of the Boeing 787 as a lego airplane. Easy to clip together. Easy to change parts, standardized. Light. And the 787 is already changing the whole aviation industry. It was a huge risk. It threatened to take Boeing down. It caught on fire or the batteries did. But they fixed that. And now we have a more flexible, more efficient, lighter, stronger, easier to maintain airplane that put the US ahead of the industry again. It was a huge risk. I followed it closely. It’s the kind of bet I like.
Black and white. Win or lose. And Boeing won. Now Faraday is trying the same thing with cars. And they got the best team in the world to help them.
BMW Team Did Not Move for Money but Love
I owned and operated a recruiting company in Tokyo Japan for several years and have a very good feel for why executives switch companies. The first thing you learn as a new recruiter is that it isn’t about the money as everyone assumes. Even though candidates will tell you it is. If you believe it, you’ll fail.
It’s about intangible things. Technology, leadership, dreams. Recruiters only deal with the top talent as they charge (or we charged up to 35% of annual salary) for a successful introduction. For us it kind of was about the money.
But I can smell a rat here. if they whole team left. Top guy, all the team. It tells us something very important. A high performing director with a crack team of designers using advanced technology are generally happy. They get paid to play around with stuff they like. Remember we’re all kids at some level. And engineers love to monkey with stuff.
So we have a real mystery on our hands. Why would a team. Who likes each other (they moved together), is working with the coolest stuff out there (new production processes and new materials likely to upset the apple cart globally) at a top manufacturer (BMW), working on a car that was by all measures cool, leave?
The essentially means kicking the teeth in of their former colleagues if you don’t realize. It’s a big deal. People get violent when their whole team leaves like this. I’ve been in a meeting with a world famous CEO talked (joked of course…ha …ha..voice gets deeper and drops off menacingly) about getting an aluminum bat and going to a competitor to cap a few guys.
Luckily he was just blowing off steam and we were old friends. But I’m telling you, this is an emotional thing. And you throw in the nationality thing too. A top German team going to a Chinese startup? And you have hot stuff man. Human emotions boiling over.
I wasn’t there. I’m just assuming. But I will bet my Model 3 downpayment that BMW was not letting them use the technology to the best of it’s ability. That they saw a future that BMW did not. And Faraday shared that future. And, lucky for us, we will soon find out what that was.