Musk shows interest in buying soon-to-close GM plants for Tesla
Published Sunday, December 9, 2018 11:49AM EST
Last Updated Sunday, December 9, 2018 6:56PM EST
Elon Musk says he might purchase soon-to-be-shuttered General Motors factories and start assembling Teslas inside them.
Musk made the remark in an interview with CBS’ “60 Minutes”, saying he might be interested in purchasing some of the five facilities GM plans to stop using by the end of 2019.
A controversial figure known for making outlandish statements, Musk may nonetheless be serious about exploring an interest in the GM factories, according to one analyst.
“It’s always hard to tell with Elon. Sometimes he’s musing off the cuff and sometimes there’s really thoughtful strategy behind it,” Will Mitchell, a professor of strategic management at the University of Toronto’s Rotman School of Management, told CTV News Channel Sunday.
In this case, Mitchell said, there could be seriousness to Musk’s claims because Tesla is delivering more vehicles than it ever has before and running near production limits at its existing factory in California.
“There’s pent-up demand for Teslas and for electric vehicles generally. They will need more production capacity,” he said.
One of the five facilities earmarked for closure by GM is the assembly plant in Oshawa, Ont.
Mitchell said there was a “very low” chance that Oshawa would be one of the expansion targets for Tesla, given the difficulties of cross-border manufacturing and other issues.
“It’s a huge plant. They’re not ready to go to that scale of production yet,” he said.
“Never say never, but it’s unlikely.”
Additionally, Mitchell said, the Oshawa plant would need significant retooling in order to produce electric vehicles. GM had cited a company-wide move toward electric vehicles as one of the reasons it was abandoning Oshawa.
An estimated 2,500 jobs will be lost in Oshawa when GM ceases operations in that city. Asked what theoretical interest from Tesla could mean for affected workers, Mitchell said they would need to be retrained for electric vehicle production just as the plant would need to be renovated.
“If Tesla wants to talk to Unifor and talk to the workers, that would be great – but I wouldn’t mortgage a house on it right now,” he said.
Unifor president Jerry Dias agreed with that sentiment, telling CTV News Channel he would be happy to talk to Tesla but didn’t expect anything to happen on that front.
“They’re intriguing comments, but I’m not attaching a lot of weight to it,” he said.
Dias said electric vehicle sales projections he had seen don’t suggest a significant need to manufacture the vehicles at large scale.
“The only solution for Oshawa is General Motors at this time,” he said.