Detroit - Still the Automotive Capital of the World?

[Lowell]

Google's Self-Driving Car Project just announced that it's building what it calls a "self-driving technology development center" in Novi, Michigan, about 30 miles northwest of Detroit. The 53,000-square-foot facility will be used for research and development in concert with the company's Michigan-based partners — this is still the home of the American auto industry, after all.
http://www.theverge.com/2016/5/25/11...-novi-michigan

There were the oil shocks, the rise of superior imports, a plague of safety and quality control issues, outcry over the environment destruction, all arriving at the point where two of our “Big 3” were bankrupt and the third hanging on by fingernails and leveraged to the hilt such that even the name Ford was collateral. Detroit, city and auto capital, was dead. So it seemed likely.

To my eyes it appears we maintained just enough of the critical mass of skills to keep us relevant at a time in which the industry is radically reforming. Mobility is rapidly being redefined by connectivity, apps, the sharing economy, self-driving units, new power sources and artificial intelligence and Detroit is where they are all coming together.

Just our previous manufacturing skills set table for the emergence of the auto industry in 1900, so it seems we are well-positioned for the new era of mobility. If one is into mobility solutions, Detroit is again where you have to be and our snowball is rolling downhill. Mobility Capital instead of Auto Capital?

Thoughts?

---------------------------------
To illustrate my point, in addition to Google, here are some recent items I have encountered…

Cosworth, the English powertrain and electronics supplier, is a legendary name in motorsport as builders of iconic DFV Formula 1 engines opening a plant in Detroit at a reported cost of $30 million.
http://www.autoblog.com/2016/05/26/c...etroit-report/

The Shell Eco-Marathon brings wild-looking cars to the streets of Detroit Welcome to "Driving Detroit," a Roadshow series taking a high-fidelity look at the cultural and economic revolution under way in the Motor City. Exciting new mobility and transportation startups are appearing every day, and transformed, re-energized auto industry stalwarts are bringing new technology and fresh ways of thinking to bear in Detroit. Modern America was built on the back of Motown, and this city's nascent industrial and cultural revitalization has all the makings of America's greatest comeback yet.
http://www.cnet.com/roadshow/news/dr...-economy-race/

Flex-N-Gate owner Shahid Khan said today his company will invest $95 million to build a new plant in Detroit that will supply parts to Ford that will initially create about 400 jobs as is being discussed on this forum.
http://www.detroityes.com/mb/showthr...ndustrial-Park

General Motors, like many traditional automobile manufacturers, has no illusions about what ride-sharing apps and driverless cars will do to the level of personal car ownership. So it is beginning to lay the foundation for its own ride-sharing services. It pumped $500 million into Lyft, the largest US competitor to Uber, which was once a close competitor, but now trails far behind. And today Bloomberg reported that GM has acquired employees and technology left over from Sidercar, a ride-sharing service that shut down in December of last year.
http://www.theverge.com/2016/1/19/10...de-sharing-app

And from last ear, IMO, the biggest one:

General Motors will invest $1 billion in its Warren Technical Center and add about 2,600 jobs over the next four years.

"This is an investment in our people who work at the Tech Center because it is positioning the company for long-term growth by enabling new levels of innovation and collaboration,"
http://www.freep.com/story/money/201...rren/27255467/

[313WX]

In terms of critical mass and culture [[Detroit is the only major city in the world in which the only mode of transportation is the automobile)?

I believe so.

[iheartthed]

Detroit is the only major city in the world in which the only mode of transportation is the automobile)

The automobile is not the only mode of transportation in Detroit.

[maverick1]

One thing that people ignore, overlook, and play down about Detroit is that we know how to make things. Silicon Valley is very slowly coming to understand this. People think the auto industry is all muscle, no brains. This has never been true. The thing is we just don't implement technology just because it's cool and innovative. It has to have some practical use and be profitable.

[313WX]

The automobile is not the only mode of transportation in Detroit.

Ok then, the *primary* mode of transportation in Detroit.

[hybridy]

You forgot the $1 Billion Ford HQ renovation/expansion in Dearborn...

Also this too:
http://www.crainsdetroit.com/article...oreUserAgent=1

[Cincinnati_Kid]

It's the auto capital of the U.S. China, Japan, Germany, Korea, etc.. are all mass producing vehicles. The industry is a global market now.

[313WX]

Also, this was forgotten as well with respect to GM...

http://media.gm.com/media/us/en/gm/h...11-cruise.html

GM to Acquire Cruise Automation to Accelerate Autonomous Vehicle Development

[313WX]

And this as well relating to GM...

http://www.wsj.com/articles/gm-maven...ton-1463655531

GM Maven Car-Sharing Unit to Expand to Washington, Boston

[Tramhamck]

I moved to Detroit in 2010 [[from southern Illinois/Saint Louis, Missouri area) specifically because I wanted to get into the auto industry. Obviously the degree of which that industry contributes to the local [[and national) economy has been diminished over the years, but what I think should be taken into account is the perception of the area from outside of Michigan. I always believed growing up that Detroit was the place to go if I wanted to get into cars [[knowing nothing about the area itself or any of the issues it faced). When I moved up here, I still found that to be true. Both in the job opportunities I was presented with and in the perceptions of my fellow students from around the country and around the world. Detroit [[or often in their cases, SE MI) was just where the car industry was headquartered. I'll admit that maybe some amount of this was based around the region's lengthy history more than its present production, but the point I'm trying to make is that for many people outside of town who don't necessarily have the numbers to know the shrinking impact of the auto economy, Detroit is still the home of that sector. That's important. Perception does a lot for people. That's why even as frivolous as it may seem, things like the decision to rebrand the Dime Building as Chrysler House are important. People coming in from out of town with no knowledge of the area are expecting to see those names. We've got a gigantic concentration of engineers in SE MI and one of the best design schools in the country [[CCS). Combine that with the region's still quite large auto economy [[largely in the burbs) and it's still very convincing to the people that we're trying to lure here.

[Pam]

I don't understand the push for driverless cars. Who wants them? Most consumers don't.

http://www.bizjournals.com/sanfranci...er-google.html

[ndavies]

I don't understand the push for driverless cars. Who wants them? Most consumers don't.

http://www.bizjournals.com/sanfranci...er-google.html

Transportation businesses want them. Just think of how many employees they can cut. Think of all the shuttle bus, taxi and delivery truck drivers. Think of all the regulations that would no longer apply. A robo-truck never needs sleep. It never needs to pass a drug test.

If robo-cars cut accidents by even a tiny percentage, The insurance industry will price you out of driving. Oh, you want to drive your own car., That will be $2000 a year extra.

[313WX]

Transportation businesses want them. Just think of how many employees they can cut. Think of all the shuttle bus, taxi and delivery truck drivers. Think of all the regulations that would no longer apply. A robo-truck never needs sleep. It never needs to pass a drug test.

If robo-cars cut accidents by even a tiny percentage, The insurance industry will price you out of driving. Oh, you want to drive your own car., That will be $2000 a year extra.

That's the long term goal obviously, and I applaud the Automakers for being ahead of the game for once, but we're decades away from reaching the utopia you describe.

Even if the technology becomes sophisticated enough to the point of eliminating the need for human drivers in the near future, there's still going to be the drawn out fights over who's going to be liable if this technology malfunctions [[which is why GM decided not to partner with Google and instead buy Cruise Automation outright).

[JBMcB]

I don't understand the push for driverless cars. Who wants them? Most consumers don't.

That's consumer sentiment now. Car companies need to plan for what sentiment is going to be in 10-20 years. I know a half dozen high school graduates who do not have their drivers license yet, and really don't want to get one, which is rather unusual in the Metro Detroit area to say the least. I think this is going to be more common than not in the next decade or two.

[Lowell]

I don't understand the push for driverless cars. Who wants them? Most consumers don't.

I could see a lot of application in closed community situations, industrial parks, retirement communities and such. For going out on public roads I am still trying to figure that out.

I see it winning approval by increments. Would I like to have self-driving as an auto-pilot option/extra-set-of-yes option on my car? Definitely. I think that is how the concept will gain acceptance. Bit by bit people will come to realize, "damn this thing drives better than I do". It's the message in this cute ad.


When I ponder who is on the public roads [drunks, inexperienced new drivers, doddering old folk, people on and off their meds] and ask, "could a robot car do better" I get a resounding "yes".

Would I like one for my taxi driver? Not yet.

Finally I will congratulate the auto industry in branding it as mellower 'self-driving' vs robot, which they really are.

[Lowell]

It's the auto capital of the U.S. China, Japan, Germany, Korea, etc.. are all mass producing vehicles. The industry is a global market now.

Well yes and no. It is definitely a global industry and every vehicle is a multi-national production.

All major players from those countries have a foot in Detroit, many an arm and a leg too. I don't think there is any other city that is as large a meeting place or the equivalent to what is going on in Detroit at the pre-production level.

Anybody can build cars; defining and designing what mobility is about is where the action and future is. I'm happy to see that coalescing here.

[Pam]

Transportation businesses want them. Just think of how many employees they can cut. ....

I did think of that. Throwing people out of work, yay progress!

[bust]

Wasn't sure where to put this, and found here. Someone came up with 50 predictions how driverless vehicles will change things. Many we can look forward to, but he also predicts it to be grim for the Big 3. Is he correct they will be cut out of the game and/or push to join too late, or are they ready and able to compete? Are their recent moves enough to indicate they already do? And what about the other implications? I'm curious what you think.

50 Mind-Blowing Implications of Self-Driving Cars [[and Trucks)
What to expect from the next 3–20 years of autonomous vehicles

https://medium.com/startup-grind/min...re-fcc5197d509

[archfan]

50 Mind-Blowing Implications of Self-Driving Cars [[and Trucks)
What to expect from the next 3–20 years of autonomous vehicles

https://medium.com/startup-grind/min...re-fcc5197d509

If you replaced 'self-driving cars' with 'rocket packs', many of those could have been predictions from the fifties.

[ndavies]

While some of what he says will come true, I believe the automated cars will cause huge numbers of people to need new jobs. Many semiskilled people will be unemployed. Automated vehicles will lead to increased traffic congestion and parking problems

I don't believe it will threaten the current auto industry, Bloomberg reports this morning that Apple is packing off it's automated car program. They are or have laid off people involved in it.

https://www.bloomberg.com/news/artic...ake-on-detroit

I don't understand why people believe automated cars are going to make for less traffic. Vehicle miles travelled are going to skyrocket. The limit on the number of miles a vehicle can travel in a day is limited by the driver. Remove the driver and the cost per vehicle mile plunges. Traffic is going to become a disaster with All those people less cars driving around waiting for the owners to shop [[since fuel will still be cheaper than parking) or driving empty back to cheaper satellite parking garages or home. There will way more cars driving kids [[without their parents) to school and extracurricular activities. Way more parents sending the 14 year old to the store to pick up milk.

I still foresee people owning there own cars. I also don't see how there is going to be less cars sold or that people won't want there own car to get to work. Without owning your own car, you're going to be charged very high rates to get to work during rush hour. Demand pricing will be the norm, Just like the airline industry. If you need to get to work between7:30am and 9:30am you're going to pay a %75 to %100 premium over the 3:00 am price.

These automated shared cars are going to be clapped out rolling pigsties after a couple of years of use. Think of your worst rental or taxi stories and having to deal with that every morning.

[Junjie]

While some of what he says will come true, I believe the automated cars will cause huge numbers of people to need new jobs. Many semiskilled people will be unemployed. Automated vehicles will lead to increased traffic congestion and parking problems

I don't believe it will threaten the current auto industry, Bloomberg reports this morning that Apple is packing off it's automated car program. They are or have laid off people involved in it.

https://www.bloomberg.com/news/artic...ake-on-detroit

I don't understand why people believe automated cars are going to make for less traffic. Vehicle miles travelled are going to skyrocket. The limit on the number of miles a vehicle can travel in a day is limited by the driver. Remove the driver and the cost per vehicle mile plunges. Traffic is going to become a disaster with All those people less cars driving around waiting for the owners to shop [[since fuel will still be cheaper than parking) or driving empty back to cheaper satellite parking garages or home. There will way more cars driving kids [[without their parents) to school and extracurricular activities. Way more parents sending the 14 year old to the store to pick up milk.

I still foresee people owning there own cars. I also don't see how there is going to be less cars sold or that people won't want there own car to get to work. Without owning your own car, you're going to be charged very high rates to get to work during rush hour. Demand pricing will be the norm, Just like the airline industry. If you need to get to work between7:30am and 9:30am you're going to pay a %75 to %100 premium over the 3:00 am price.

These automated shared cars are going to be clapped out rolling pigsties after a couple of years of use. Think of your worst rental or taxi stories and having to deal with that every morning.

Precisely. Traffic is going to explode, and people are still going to want their own vehicles. Can't point this out enough given all the techno-babble utopianism on the subject.

[ABetterDetroit]

Getting back to the original topic. It appears that the major competition still considers Detroit very relevant even when it's not the auto show. Honda could have done this anywhere yet still decided on the D.

http://www.freep.com/story/money/car...cr-v/91971794/

[bust]

Good one archfan! But unlike jetpacks, driverless cars aren't far down the horizon. My friend from Pittsburgh tells me so. I have no idea what impact they'll make but I doubt it will be small. It's fun to think about in any case.

And it seems right on topic for this thread, which began by considering Google's new self-driving technology development center in Novi. It's an open question whether Detroit will remain the automotive capital in the driverless era too.

I really hope we get this right. It's a real opportunity. What becomes of it will of course depend on economics, and complications like insurance, legal, and regulatory considerations. It's easy to imagine how those could limit the opportunity by all manner of mistakes. But let's be optimistic. It's far from too late.

[313WX]

Good one archfan! But unlike jetpacks, driverless cars aren't far down the horizon. My friend from Pittsburgh tells me so. I have no idea what impact they'll make but I doubt it will be small. It's fun to think about in any case.

And it seems right on topic for this thread, which began by considering Google's new self-driving technology development center in Novi. It's an open question whether Detroit will remain the automotive capital in the driverless era too.

I really hope we get this right. It's a real opportunity. What becomes of it will of course depend on economics, and complications like insurance, legal, and regulatory considerations. It's easy to imagine how those could limit the opportunity by all manner of mistakes. But let's be optimistic. It's far from too late.

This "open question" you refer to is only being asked amongst those who are completely clueless about car manufacturing and how things operate within the auto industry [[I.E. Wall Street).

Companies like Apple and Google have made it very clear that they have no desire to get into the car manufacturing business. Unlike computer programming, building finished goods as big as an automobile takes a huge amount of upfront capital investment [[I.E. operating a GM or Ford assembly plant isn't cheap) the tech companies frankly aren't willing to cough up. Not to mention, they don't want to take on all of the liability that will inevitably arise from the use of self-driving vehicles and would love nothing more than to share it with or even dump it on other companies [[I.E. the car manufacturers).

And Tesla is hardly a threat to the legacy auto makers given that it can't be make a profit or match their production volume.

If anything will truly be a threat to Detroit's crown as the automotive capital of the world, it will be places such as Wuhan or Ramos Arizpe. As the manufacturing infrastructure continues to shift to these cities, research/development and its support team will eventually follow [[logistically, it makes sense in the long term for the white collar professionals and management team to be where the actual production takes place).

[bust]

I'll be the first to admit I know much less about the auto industry than most people from Detroit. Maybe had I stayed, not strayed... [[I have family members who shake their heads.) That's why I asked people's opinions here.

It was great to see the New York Times recently wrote a glowing review of the Chevy Bolt, which they say compares favorably to what Tesla has been doing:

How Did G.M. Create Tesla's Dream Car First?
http://www.nytimes.com/2016/09/15/te...car-first.html

But I wouldn't count Tesla out just yet. It's well known they've been unable to produce enough cars to meet the demand, but it looks like they're in it to win it. Their new battery factory in Nevada may be not just the largest factory in the world, but possibly the largest building in the world:

This Is the Enormous Gigafactory, Where Tesla Will Build Its Future
https://www.wired.com/2016/07/tesla-...ory-elon-musk/

Tesla Gigafactory Could Be Biggest Building in the World
http://www.autoblog.com/2015/07/16/t...ilding-report/

Of course you're correct heavy manufacturing takes a huge investment, but some of the tech companies in Silicon Valley [[etc.) have funny money cash, deep expertise in the software, and they move fast. Even if they're likely to quit or pivot just as quick if they encounter trouble [[they also "fail fast"). Maybe like you suggest partnerships will be the answer.

I'm rooting for the companies from my home town, naturally. I hope they're cutting the right path. And I'm looking forward to more of your insights. It will be interesting to see how this plays out.