Howes: Lear’s Detroit play signals growing tech boom
Detroit — Matt Simoncini wants to make one thing perfectly clear:
Lear Corp., the Southfield-based global auto supplier expected to book more than $18.5 billion in revenues this year, is not opening its Innovation Center in Detroit’s Capitol Park as an act of charity.
“For me, this is a competitive advantage,” he said Tuesday, marking the official opening of the center in a former cigar factory at 119 State St. It’s the one and only building mortgage impresario Dan Gilbert has sold from his expanding real estate empire because of what Lear’s move represents.
Namely, an expansion of the high-tech pie in Detroit, not the leafy suburbs. It’s a step from outside the orbit of Gilbert-affiliated companies by an auto industry heavyweight, recognition the city that helped put the world on wheels can woo and build a techy cred rooted in its automotive tradition.
Here’s a major player with global reach, and a lot of options, choosing the city as its creative home. Lear aims to develop next-generation technology in seating and electronic systems to power and connect both traditional cars and trucks and the autonomous vehicles just around the corner.
“I pitched the vision to Dan,” says Simoncini, Lear’s president and CEO. “He bought it. I said, ‘I need that building,’ He sold it to me. This is not a charitable event. We’re not doing this just to rehab a building” in Detroit.
He’s doing it to harness the design and engineering talent being produced by the industry, the College for Creative Studies and Wayne State University; to capitalize on the trend that young people are gravitating toward cutting-edge work in urban areas; to move Detroit forward in the competition for the 21st-century leadership in the auto industry.
Lear intends to use the 35,000 square-foot facility to develop new automotive technologies and business opportunities, to work with CCS on seating and interiors products and to collaborate with Wayne State’s School of Engineering on apps for connected cars, autonomous vehicles and alternative propulsion technology.
“If you want access to real cutting-edge design, you’re not going to find it in Auburn Hills,” says Simoncini, a native Detroiter. “You’ll find it in Detroit. I believe in it. If others choose to follow, that’s great.”
The symbolism is powerful. It’s an emphatic statement that Lear thinks Detroit can attract, retain and produce the talent it needs to compete with both foreign industry rivals and Silicon Valley hotshots — you know, the likes of Apple and Tesla, which are learning that building a car well is not as easy as it looks.
Just this week, Bloomberg News reported that Apple Inc. is scaling back its automotive plans, including the goal to build its own car. The move implicitly recognizes what this town has long known: developing, producing and selling vehicles is a complex, high-cost and lower-margin business generally deemed unattractive to tech investors.
The upshot: The arc tracing the auto industry’s future, and its intersection with the go-go tech sector, is not yet certain. It’s still flexible, bending as executives and the tech leadership reckon their financial business models and investor expectations with technical reality.
In that, Detroit and the auto industry it symbolizes cannot be dismissed. Buoyed by stronger financials, more realistic leadership and the growth prospects of new markets and the emerging transportation services sector, the industry is leaning forward.
Lear’s move “gives the city an even greater claim to” being “a global city of design,” says Rick Rogers, CEO of the College for Creative Studies. That may mean very little to everyday Detroiters in both the city and the suburbs, but it means a lot to a creative class increasingly aware that the Motor City is hot and on the move.
And Lear probably won’t be the last to join the party. Two ranking officials, including Mayor Mike Duggan, hinted Tuesday that the city could announce by the end of this year the relocation to Detroit of another industry player, powered in part by the yearning of young talent to work in an urban environment.
“It’s an opportunity Detroit really has to capitalize on,” says Steve Arwood, CEO of the Michigan Economic Development Corp. “The Lear story is definitely a leadership story.
“There will be people who follow from traditional industries who want to be part of the downtown scene. We still make things. Now you see the synergy being built on that. The eco-system is here.”
Daniel Howes’ column runs Tuesdays, Thursdays and Fridays. Follow him on Twitter @DanielHowes_TDN, listen to his Saturday podcasts, or catch him 3 and 10 p.m. Thursdays on Michigan Radio’s “Stateside,” 91.7 FM.