Howes: Gilbert targets tech challenge for Detroit autos
Leave it to Dan Gilbert to say what more than a few people in the business community are saying:
Namely, how come Detroit’s automakers are comparatively absent in the tech-driven revitalization of their hometown? He’s got a point, as much as the C-suites in Dearborn, Auburn Hills and the Renaissance Center may not want to hear it.
Don’t misunderstand: they’re investing, all right — in their core operations. In General Motors Co.’s downtown headquarters and its Warren Tech Center. In an expensive overhaul of Ford Motor Co.’s two Dearborn campuses over the next decade. In a few floors of the old Dime Bank Building renamed “Chrysler House” at the corner of Griswold and Fort streets.
But establish a product development center in the heart of Detroit? Credit Lear Corp., the Southfield-based supplier, for that. The automakers spending a lot of time and money trying to persuade Wall Street that their metal-bending car and truck business is melding with tech-driven Silicon Valley are doing less to show it in the city that put America on wheels.
Call it the paradox of success. The bankruptcies of GM and FCA’s Chrysler unit, along with the restructuring of Ford, produced leaner, more profitable companies led by more disciplined executives. Determined to avoid the mistakes and bad habits of the past, they run their shops more according to general business principles demanded by investors — not the old Detroit way.
Paternalism is out, and that’s the good news. Arguably not so good is a subtle but real change in priorities, evident more in what the companies do than what their people say. In how their civic engagement, even their philanthropic choices, are funneled through more literal readings of corporate self-interest than in the good (or bad) old days.
Case in point: the proposed American Center for Mobility at Willow Run Airport, backed by local, state and federal officials, business and civic groups, automakers and suppliers, aims to become the national test site for autonomous vehicles and traffic management.
GM voices general support for the effort, even as President Dan Ammann used the Mackinac Policy Conference in May to stress that GM would be doing the bulk of its testing on real roads, not a test bed. And FCA is said to have yet issued a letter endorsing the project — altogether, hardly a picture of unity.
“It’s really hard to get this stuff done if you don’t have the industry leading the charge,” says a ranking CEO familiar with the situation. Exactly right, which is why Gilbert, the chairman of Quicken Loans Inc., says the region and its corporate players need a unified strategy to compete for automotive tech.
Easier said than done, that. Substituting “Detroit” for “North American” and putting it before the “International Auto Show” won’t happen without a big push from GM, Ford and FCA. Reimagining the show as a mecca for auto tech, effectively displacing CES in Las Vegas, won’t happen without CEO-level leadership from this town’s automakers.
“The car business is technology on wheels,” Gilbert, the mortgage impresario and owner of the NBA champion Cleveland Cavaliers, told The Detroit News in an interview published Thursday. He’s right about that, too. Seizing highly visible ways to burnish the city’s brand and make the case as a rising tech center should not be missed.
The signs are mixed. GM moves Cadillac to New York to separate the brand from the Midwestern pall of Detroit, causing Gilbert to protest to GM CEO Mary Barra. It took a position in Lyft Inc., the San Francisco ride-sharing firm; acquired Cruise Automation; and created its own car-sharing brand, Maven.
Ford is creating its own “smart mobility company,” and sharply expanding its Palo Alto center in California. FCA is completing a deal with Google Inc. to provide vans for testing of self-driving cars.
The intersection of this town’s automotive rebound with the city’s revival and Silicon Valley’s keen interest in the auto industry is a golden opportunity for Detroit — unless this town’s heavyweights, by definition led by its automakers, blow it.
Beneath the record North American earnings of GM and Ford, and the impressive sales of Fiat Chrysler Automobiles NV, there’s a growing sense the autos are content to let other corporate players invest in the city to continue the momentum.
Subconsciously, they may be happy to let Gilbert and his wallet do the work. But even the region’s most prominent billionaire can’t ensure Detroit bests Silicon Valley in the race for advantage — and if Detroit loses, it’ll have only itself (and its automakers) to blame.
Daniel Howes’ column runs Tuesdays, Thursdays and Fridays. Follow him on Twitter @DanielHowes_TDN, or catch him 3 and 10 p.m. Thursdays on Michigan Radio’s “Stateside,” 91.7 FM.