Buss: Ford stiffens Detroit, Silicon Valley competition
Ford Motor Co. is doing exactly what it should for its shareholders by making serious investments in the inevitable self-driving future of the automotive industry. But its choice to focus those investments in Silicon Valley, not Detroit, signals the Motor City may already be losing the battle for the industry’s future.
It’s certainly a blow to the state and the business leaders who are investing heavily to retain the auto industry and convince outsiders that Michigan is the best place for research and development of autonomous vehicles.
That it’s coming from the very company that trailblazed the automobile on Detroit’s streets, and made this town into the auto capital of the world, is even more telling.
Companies aside from the Big Three have and will continue to invest some of their future plans here. Google, for example, is opening a new vehicle testing facility in Novi. Toyota and Hyundai have big engineering centers in Ann Arbor. And so on.
But Ford’s choice of Silicon Valley over Detroit symbolically crowns California the winner.
Consider this lede of a recent Bloomberg piece: “For the first time in America’s industrial history, the center for automotive technology is drifting away from Detroit.”
That’s not the kind of publicity Gov. Rick Snyder was hoping for when he launched Planet M in June. The campaign is supposed to position Michigan as the epicenter of mobility innovation, and attract investments to the state.
Ford’s monetary investment right now in Silicon Valley won’t yet match the $1.6 billion it pledged to Livonia and Ohio assembly plants earlier this year. But it’s clear the company sees California as the Promised Land for the most important kind of vehicle innovation of the future: digital.
“We see autonomous vehicles as having as significant an impact on society as Ford’s moving assembly line did over 100 years ago,” CEO Mark Fields said at a press conference in Palo Alto.
He continued to compare the company’s dedication to providing autonomous vehicles to the masses to Henry Ford’s mission of making the original automobile accessible. And he’s touted the “bazaar” of ideas and creativity available in California.
Ford is investing in a reinvigorated Dearborn campus, friendly to millennial employees and ready to integrate with the mobility focus.
But with so much of the excitement out West, what will Ford’s future in Detroit look like? Will the automaker’s brawn be here and its brains in Silicon Valley? Certainly this industrial town will struggle to compete for talent with the trendiness critical mass of tech-minded workers in California.
Ford isn’t the only Detroit carmaker courting California. General Motors Co. has invested $1 billion in Silicon Valley-based companies as it pursues its semi-autonomous vehicle technology, and it has a partnership with ride-sharing service Lyft.
The Las Vegas Consumer Electronics Show hopes to expand its automotive technology segment to large scale, putting pressure on Detroit’s North American International Auto Show. The Detroit show is fighting back by launching its own mobility-focused show — Automobili-D — set to debut during the regular car exhibit this January.
Detroit still is the place to build cars. That’s good for today.
But as the creativity and innovation segments of the industry move west, it will inevitably draw more of the white-collar jobs with it, perhaps even the headquarters. This is a critical moment. If Michigan doesn’t get the automotive future right, not much else will matter.