The first two acts in Mark Duchesne's manufacturing career came at buttoned-down Toyota Motor Corp. (NYSE: TM): 22 years adhering to process-driven, box-checking principles. Then came five freewheeling years at Tesla Inc. (NASDAQ: TSLA) where every day was an adventure.
"We didn't necessarily know what we were doing from one day to the next," he said of life in Elon Musk's world of robots named for comic book heroes and a parking lot assembly tent to meet demand and expectations for electric cars and SUVs.
Now Duchesne is on to Act 3, overseeing the construction of Nikola Corp.'s (NASDAQ: NKLA) $600 million manufacturing plant in Coolidge, Arizona. He is also keeping an eye on the pre-production Tre heavy-duty battery-electric trucks Nikola is building in an Iveco plant in Ulm, Germany.
Duchesne had no role in Nikola's decision that led to the cancelation of its biggest order, an agreement with Republic Services to build 2,500 electric refuse trucks. Nikola found the refuse trucks couldn't be made on the same chassis as the Tre. Fulfilling the order would have cost $200 million more than expected and required a new chassis.
The latest setback for the startup electric truck maker is one less distraction for Duchesne. His task is completing the first phase of the plant and assembling Tre models from kits of parts imported from Germany and a couple of fuel cell trucks by the end of 2021. On Tuesday, Duchesne leads a team raising the factory's first steel beam.
Duchesne talked with FreightWaves about how his manufacturing experience influences his current project. Here are excerpts from the conversation edited for length and clarity.
What were the differences in getting manufacturing started at Toyota and Tesla?
Starting up a new facility, no matter what company you're doing it with, it's super challenging. You're bringing thousands and hundreds of thousands of points together, and you're bringing them all together so that at the right time, you can actually start producing a vehicle. At Toyota, you're working with a group of hundreds of thousands of people all around the world. And you're bringing all of those experiences together. And everybody's got a little piece of the pie. Everybody's following a system that is really well defined and almost a guarantee for success. At Tesla, we didn't have any of those systems. We didn't have the support of anybody else. And we didn't necessarily know what we were doing from one day to the next.
What does that mean for Nikola manufacturing?
Nikola's a little bit more like Tesla in the fact that we're moving very, very quickly. We don't have the rule book that we have to follow. We are making it up as we go. And I think the difference [from] Tesla is we recognize that we have to move towards those systems. Those systems are what's going to ensure our future success. But for right now, we're moving with people who know which big check items we have to do for sure and which ones can we rely on on our knowledge to get past?
You describe it as a numbers game. How?
If there's 200,000 checked items on a Toyota project, there's 2,000 that you really must do. And out of those 2,000, there's 200 that are really going to cause you problems if you don't do them properly. And then out of those 200, there's 20 that are going to kill you if you don't get them right.
Is there a way to balance the two approaches?
I learned everything I know from working in the Toyota system. I'm a huge fan of it. The cautionary tale is what people naturally do when they're posed with a problem is study how the system failed. Conversely, at Tesla, we had the greatest problem solvers in the world. We were so good at firefighting and coming up with unique solutions that it became addicting. The problem is, if you don't try to recognize why the fire started and who started it and try to resolve that problem, you'll never get better. The plan for Nikola is to find that sweet spot in between.
How has the pandemic affected timing in Germany and Arizona?
If we were in full production and running and trying to navigate through this pandemic, I think it would be a horrible experience. But we're not trying to run operations. So, we don't have to manage that part of things right now. I would never say the word lucky in the middle of a pandemic. But if we have a chance to work our way through, now's a good time for us to do this.
How does building a fuel cell truck different from a diesel or a battery-powered truck?
There's no engine. But there is a motor. So there's fewer parts. However, there's maybe a little bit more precision involved in installing those parts. But the differences in building a fuel cell truck over a battery truck over an [internal combustion engine] are not great. One of the phrases I learned at Toyota is called monozukuri. A loose translation is, "the art of making things." It's not really so important what you're making.
What do you mean that the first phase of the Arizona factory is a pilot plant?
We're going to build the pilot line with a capability of up to 10 trucks a month. And those will be mostly done by hand. Part of the reason for that is it gives all these new people that we're bringing on board a chance to understand how the vehicle is built before we are under the pressure of production volume.
Can you successfully assemble trucks while the plant is being built around you?
It'll be a bit of mayhem out there because we'll be in one or two buildings doing actual production work. And we'll be surrounded by construction building out the rest of phase one. I'm targeting to try to have some of these early trucks as soon as the second quarter next year in very, very low volume while we get the rest of [the plant] ready to go.
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