"If I had asked people what they wanted, they would have said faster horses."-Henry Ford.
You can't talk about the evolution of the automotive assembly line without first discussing Henry Ford and the Ford Motor Company (NYSE: F). It's been more than a century since Ford first introduced the modern assembly line, which forever changed industrial manufacturing. Today, Tesla Motors (Nasdaq: TSLA) and other cutting edge automakers are bringing Ford's assembly line into the 21st century thanks to technological advances in robotics. It's in this spirit, that we'll look at how the automotive assembly line has changed over the past 100 years.
By introducing the moving assembly line in 1913, Henry Ford was able to cut the production time of Ford's Model T by an astounding 75%. This method of producing cars consisted of a system of conveyor belts that carried parts past workers who would then perform certain tasks at different stations along the assembly line . This was significantly more efficient than the old way of doing things, which was to build an entire car at a single station with a team of workers.
Ford first began this process as a way to speed up the time it took to build the Model T's magneto, a component that supplied ignition energy to the engine, according to Car and Driver. Instead of having one worker assemble a magneto at a rate of one every 15-minutes, using a moving assembly approach, Ford was able to cut the assembly time to just five minutes. Once Ford saw the benefit of this method for building components he decided to implement this on a larger scale by applying it to the entire process of building cars -- start to finish.
This forever changed the automotive manufacturing process. Ultimately, Ford's new approach reduced the man-hours needed to assemble the cars, which in turn helped Ford cut costs. These cost savings allowed the company to sell its cars for just $206 apiece in 1913, more than four times lower than the $850 price point of a Model T just five years earlier before the introduction of the moving assembly line. By 1916, Ford was producing around 2,000 Model T cars per day.
However, despite the dramatic advantages to this new approach, automotive production lines were still shockingly rudimentary compared to today's standards. Most of the work at that time was done with physical labor, unlike today where robots and machines do much of the heavy lifting. For example, Ford's Highland plant employed around 48,000 workers at its peak, a stark contrast to the mere 500 workers on Ford's assembly line at the company's Michigan manufacturing plant today. Even Tesla's massive 5.4 million square foot factory in California today only employs around 6,000 human workers.
Revolutionizing a century's old tradition
These days, a chassis is no longer pulled by a winch and rope like back in the early days of Ford's conveyor system. Today, Tesla's Model S chassis is pulled along the assembly line by carefully orchestrated magnetic tracks, which make it more efficient to move large pieces and parts.
Additionally, unlike the production lines of the 1900's, automakers today are able to build multiple vehicle models on a single assembly line. Tesla Motors, for example, recently retooled its massive Fremont factory in order to crank out both its Model S sedan and Model X crossover EVs on the same line. This will boost Tesla's production by more than 25%. The capacity upgrade will also enable Tesla to produce more than 35,000 vehicles this year, up a whopping 55% from last year.
Tesla's high-tech factory is optimized for maximum efficiency, with more than 200 Kuka robots performing a complicated ballet of tasks. It starts with a robot inserting a huge aluminum sheet or blank as they are called into a press line which then stamps the material into three-dimensional parts like windows or roofing. Later, in Tesla's Body Center, car parts move from one robot to the next while each Kuka bot executes various tasks including bonding, riveting and welding sub-assemblies into the Model S form. You can see more of this process in the Tesla Motors video below.
A rich history
The company's 5.4 million square foot Fremont factory is unique in that it has housed three generations of vehicle assembly over the years including the likes of General Motors (NYSE: GM) and Toyota (NYSE: TM).
General Motors first opened the plant in 1962 and owned it outright before entering a joint venture with Toyota in 1984. This partnership dissolved when GM went bust in 2009, which allowed Tesla to swoop in and buy the former NUMMI factory for just $42 million a year later. Today, the factory is perhaps the most advanced that it has ever been in its 50-year history of automotive manufacturing.
Other major automakers have followed Tesla's lead. Hyundai and Beijing Motors created a massive factory outside of Beijing in 2012 that uses more robots than people to crank out a million cars a year. In fact, more than 50% of robots made today are used in auto manufacturing, according to research from Seegrid. This enables automakers such as Tesla and Ford to create consistent products at a faster pace than ever before, while also reducing worker related injuries.
As you can see, the auto assembly line has come a long way from the conveyor belt system of the early 1900's. "If I could save every one of my workers 50 steps a day then I could save miles by the end of the year," explained Henry Ford in 1914. Ultimately, I believe Mr. Ford would be thoroughly impressed with the precision and efficiency of today's auto assembly line.
Warren Buffett's worst auto-nightmare (Hint: It's not Tesla)
A major technological shift is happening in the automotive industry. Most people are skeptical about its impact. Warren Buffett isn't one of them. He recently called it a "real threat" to one of his favorite businesses. An executive at Ford called the technology "fantastic." The beauty for investors is that there is an easy way to ride this megatrend. Click here to access our exclusive report on this stock.
Tamara Rutter owns shares of Tesla Motors. The Motley Fool recommends Ford, General Motors, and Tesla Motors. The Motley Fool owns shares of Ford and Tesla Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.