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Takeover of a Tesla supplier

Tooling & Equipment International (TEI) is now part of GM

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As Norihiko Shirouzu reported for the news portal Reuters, the little-known company called Tooling & Equipment International (TEI) has helped Tesla (TSLA.O) push back the frontiers of "gigacasting", the process it pioneered to cast large body parts for cars in one piece to save time and money.

TEI is now part of General Motors (GM.N) after agreeing a deal that may have flown under the radar but is a key part of the U.S. automaker's strategy to make up ground on Tesla, four people familiar with the transaction said.

The development of Tesla's gigacasting molds

By snapping up a specialist in sand casting techniques that accelerated the development of Tesla's gigacasting molds and allowed it to cast more complex components, GM has jump-started its own push to make cars more cheaply and efficiently at a time when Tesla is racing to roll out a $25,000 EV, the people said.

With TEI gone, Tesla is leaning more heavily on three other casting specialists it has used in Britain, Germany and Japan to develop the huge molds needed for the millions of cheaper EVs it plans to make in the coming decade, the four people said.

At the same time, Tesla is scrambling to find another sand casting specialist to fill the role TEI performed, or even develop such crucial expertise in-house to cut its reliance on outside suppliers, the people said.

General Motors acquired TEI

"General Motors acquired Tooling & Equipment International (TEI) to bolster its portfolio of innovations and secure access to unique casting technology," GM said in a statement to Reuters in response to questions for this story.

Tesla and TEI President Oliver Johnson did not respond to requests for comment. Like GM, a host of automakers from Ford F.N to Hyundai (005380.KS) to Toyota (7203.T) are trying to ape Tesla's gigacasting know-how to match its design and manufacturing efficiency and avoid being undercut on the showroom floor.

Gigacasting is core to Tesla's "unboxed" manufacturing strategy unveiled by Chief Executive Elon Musk in March, which he hopes will slash the assembly costs of the next generation of cars by half.

The strategy hinges on producing the structural platform and subframes of a car in one piece using gigacasting and then snapping it together at the end with the other parts of the vehicle being made in parallel.

Gigacasting know-how by TEI

That gigacasting know-how, which uses casts made out of industrial sand with 3D printing, has been made possible in part by TEI along with the three other suppliers Tesla has been using.

James Womack, a former research director at the Massachusetts Institute of Technology, believes Musk's new manufacturing initiatives have come as a shock to the legacy auto industry "shaking up everyone else".

"It even woke up Toyota - the industry's current very best in manufacturing - to embrace gigacasting and other innovations from Tesla," said Womack, co-author of "The Machine That Changed The World", the 1990 book about Toyota's lean production system.

Womack believes the competition to achieve even greater efficiency is far from over.

"Gigacasting and unboxed are worthy of experiments, but cutting edge endeavors almost always take more time than initially projected to reach maturity and some experiments will fail," said Womack.

Source : www.reuters.co


 

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