joined by Sen. Dianne Feinstein and a slew of local officials, unveiled a huge “Tesla” sign at what used to be the New United Motor Manufacturing Inc. factory in Fremont. Toyota shuttered the place in April and sold it to Tesla Motors one month later for $42 million. Its resurrection as the factory that will build the Model S sedan brought the usual talk of green jobs and a brighter future.

“It says that we can have a blue-collar manufacturing base, but it says if we’re smart, that manufacturing base is green. It’s green energy. That’s the future,” Feinstein said Wednesday afternoon. She called Musk “a real hero” for “creating jobs in California.”

Musk took it all in with his characteristic grin and called the opening “a hugely historic moment in Tesla’s life.”

It is indeed.

Musk has made a huge bet with the Model S, the sexy seven-passenger electric sedan that will make or break the company. The car promises all the luxury of a BMW 7-Series or an Audi A8 and a claimed range of up to 300 miles. The U.S. Department of Energy was impressed enough by the car, and the company, that it loaned Tesla $465 million to get it built.

And Tesla has managed to attract the attention of Daimler and Toyota, both of which have made huge investments in the company. Daimler’s investment reportedly was $50 million and includes Tesla’s help developing the Smart Electric Drive and electric Mercedes-Benz A-Class. Toyota invested $50 million and reportedly will spend another $60 million working with Tesla to develop an updated Toyota RAV4 EV.

For all the backslapping and bonhomie of Wednesday’s grand opening, Tesla has a lot of work to do and the clock is ticking. Development of the Model S sedan is progressing at a steady clip, but the factory that will begin building the car in 2012 is little more than four walls with a roof.

The factory, which General Motors built in 1962 and operated with Toyota as a joint venture beginning in 1984, is immense. It covers some 5.5 million square feet and cranked out an average of 6,000 cars per week. Tesla plans to build 20,000 Model S sedans annually to start. It expects to use no more than 20 percent of the floorspace and says it will have plenty of room as the company grows and its product lineup expands.

But that’s in the future. Right now Tesla needs to build the Model S, which Tesla claims will sell for $57,400, and Musk says it’s on track.

“We’re very confident of starting production of the Model S in 2012,” he said. “There are no outstanding engineering challenges left.”

Work continues at a feverish pace at Tesla’s 370,000-square-foot headquarters (and R&D center) in Palo Alto, where some 200 or so people are developing the car’s powertrain. The bodywork, designed by former Mazda designer Franz von Holzhausen, has been tweaked by a pair of aerodynamicists with Formula 1 experience and tested in Chrysler’s wind tunnel. Tesla has designed and engineered the suspension and steering components — the car will not, as some predicted, use a Daimler or Toyota platform. Virtual crash testing is underway.

VP of vehicle engineering Peter Rawlinson, who has engineered cars for the likes of Jaguar and BMW, says the Model S will rival the best from Europe and Japan. That remains to be seen, because so far the only Model S we’ve seen is a maroon prototype, which was silver when Tesla rolled it out at the Model S unveiling last year. Few outside the company have driven  one. But Tesla says we’ll see driveable production-intent prototypes by the end of the year.

There’s still a lot of work to be done on the car, but for now it appears the bigger challenge is preparing the factory to build it.

Toyota’s sale of the factory included some key infrastructure, not the least of which is the paint shop. Setting up an automotive paint shop is expensive and time consuming, and Tesla saved itself a lot of time and trouble. Tesla also picked up six giant mechanical blanking machines and presses that will cut up long sheets of aluminum and stamp them into body panels.

“The big benefit of this factory is it’s almost ready to go,” said Gilbert Passin, the vice president of manufacturing that Tesla poached from Toyota. “We just have to retrofit it to suit our production.”

That is no small feat, and the work started shortly after Tesla bought the factory in May. It has bought dozens of truckloads of tooling and equipment from auto industry suppliers throughout Michigan. A massive hydraulic press — Musk called it the largest in North America — sits in pieces in Fremont, awaiting installation.

“We had to spend a lot of money, but it is a fraction of what we would have spent to build new,” Passin said of the equipment descending on the factory.

Tesla still has to build the assembly lines, line up the suppliers and train a workforce. Passin said the company is considering having some suppliers set up shop in the factory to build, say, the seats that will go in the Model S. That will streamline logistics and cut costs, he said.

As for the workforce, Tesla already has hired 70 former NUMMI workers and will hire about that many more in the coming year. The factory will employ 400 to 500 people when it reaches full production in 2012, Passin said. Tesla currently employs about 700 people worldwide and expects that to reach 2,000 by 2012.

Many of those employees were on-hand Wednesday for a party to celebrate the factory’s grand opening. There were tubs of champagne and a line of catering trucks serving Korean, Vietnamese and Mexican food. And there was Musk, looking like a kid on Christmas morning, outside “the factory we wanted but never thought we could get.”

Photos: Jim Merithew / Wired.com

See Also:

• How Elon Musk Turned Tesla Into the Car Company of the Future
• Tesla IPO Raises $226.1M, Stock Surges 41 Percent
• Toyota, Tesla Team Up on EVs
• Feds Lend Tesla $465 Million to Build Model S
• Share in Tesla Electrifies the Teutons

Tesla Motors CEO Elon Musk with  Sen. Dianne Feinstein  just before unveiling the giant “Tesla” sign on what was the New United Motor Manufacturing Inc. factory in Fremont, California.

Authors: Chuck Squatriglia

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