Running an Airline or Building Cars: The Perils of Legacy

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This weekend my family and I toured the factory in Fremont, Calif., where Tesla Motors produces its electric cars. I was enthralled.

Through it all, I couldn’t help but make the airline comparison. Tesla certainly blows away the automotive competition, but they couldn’t have done it without starting from the ground up. Airline upstarts like Virgin America have also blown away their legacy competitors in almost every metric, in large part because they had the luxury of starting from scratch.

Some examples of what sets Tesla apart:

  • We saw a seven-story stamping press Tesla bought in Germany. The manufacturer said it would take one year to dismantle the behemoth machine and move it to California. The Tesla folks said, “Too slow, we’ll figure that out internally.” And it took them just four months.
  • We saw the tour leader balance an entire side-panel of aluminum (the whole length of a car!) on one finger—it’s that lightweight. Yet the Model S is the safest vehicle ever tested by the U.S. government, in several cases breaking testing machines when trying to reach the limits of the car’s chassis.
  • We saw workers hand-polishing metal pieces with care, as the tour guide shared the company narrative about how the cars are works of art that require real craftsmanship. Those polishing seemed to actually believe the narrative.

But more than specifics, there was an air of pride and excellence that something special was going on there—that as a collective, they were achieving the unachievable because they were willing to think outside the box and give it their all.

Here’s where I got a little sad for the traditional auto manufacturers. And the legacy airlines.

We were witnessing all this in a building that had been sold to Tesla in 2010 by NUMMI, a joint venture of Toyota and General Motors that failed.

NUMMI employees hated working in that building, so the first thing Tesla did was paint the place with white, gray and red epoxy, top to bottom. They added beautiful rest areas and showers, because they found many workers rode their bikes to work. They offered free and healthy snacks and drinks. They’re planning a huge vegetable garden where workers can take home what they grow.

Tesla’s focus on employees, technology, and capitalization/investment has allowed them to build a product that is universally agreed upon to be extraordinary. And which means they are able to grow despite no traditional marketing, just word of mouth. As you can tell, it works—I’m already an evangelist.

Yesterday, just as I was contemplating the sad correlation between the auto and airline industries, I read this remarkable story about a former United Global Services flier and how Virgin America stole his heart and loyalty.

Perhaps the ultimate challenge is not to create a groundbreaking product. The ultimate challenge is to create this within the confines of a legacy infrastructure, culture and workforce.

Photo: Flickr/Maurizio Pesce