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Tesla acquires Grohman Engineering to boost production speed

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Tesla has acquired Germany’s Grohman engineering. The acquisition is significant gain on the car manufacturer’s part considering that Grohman is one of the world’s foremost companies with regards to advanced and automated manufacturing. Tesla will now be able to leverage the German automaker’s facilities to boost its lagging production speeds.

This acquisition comes after Tesla increased its output target by half a million in face of huge demands from customers.

After increasing our output target to 500,000 cars per year by 2018, we began searching for the best engineering talent in automated manufacturing systems. Today, we are excited to announce that Tesla has entered into an agreement to acquire Grohmann Engineering, a world-renowned engineering company in Prüm, Germany, which will become Tesla Grohmann Automation.

Tesla may also chose to use the advances Grohman has made in automotive manufacturing in its decades of operation, into its other production facilities. Indeed, the company hinted that several critical elements of its automated manufacturing systems will be designed and produced in Prüm with the aim of making its other production facilities more efficient and advanced.

Both of these companies had actually been collaborating together since the past few months and decided to take their mutually profitable relationship to the next level through an acquisition.

Speaking on the topic, Tesla founder and CEO Elon Musk said,

This will really be our first acquisition of significance in our whole history.

He also went on to confess that Grohman was actually his company’s first choice, when it had to resort to bringing an expert to help it “build the machines that build the machine”. The second machine in this statement refers to Tesla’s state of the art cars, which the company has been unable to produce as quickly as it would have liked to.

With Grohman on board though, Tesla hopes that the balance of the equation will change and it will be able to “exponentially” boost its production rates and quality. Meanwhile, the acquisition will also lead to an expansion in Grohman’s current workforce with an estimated 1,000 new job created over the course of the next few years.

While the financial terms of the deals have not been disclosed, it probably involved significant expense on Tesla’s part. Grohman is a major automotive manufacturer and has made a significant name for itself across the globe. The deal still needs to get clearance from regulators and assuming that there is no hitch there, it should close by early 2017.

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