Detroit looks to California’s Silicon Valley to hire talentFor the first time in America’s industrial history, the center for automotive technology is drifting away from Detroit.
Ford Motor Co., aiming to put fully autonomous vehicles into the economy by 2021, announced that it’s doubling the size of its office in Silicon Valley to 260 people and investing in four companies that are key to building self-driving cars. The carmaker’s move follows more than $1 billion in investments made by Detroit-based General Motors Co. in a pair of California technology companies this year to keep up with Google’s autonomous-car project and Uber Technologies Inc.’s ride-hailing business.
While the old-school mechanical engineering remains in the Midwest as does most low-skilled factory work, these investments show Detroit carmakers have realized that they must go to the nation’s technology center to find the software expertise needed to make tomorrow’s autos. Traditional automakers now directly employ hundreds in Silicon Valley, also home to Tesla Motors Inc., based in Palo Alto, California.
“The shift to California is undeniable,” said Eric Noble, president of the CarLab consulting firm in Orange, California. “The technological development for autonomous vehicles and intelligent cars will continue to be done in Northern California because that’s where the knowledge is.”
Ford and GM, racing to stay among the technology leaders, face a few tough realities. Companies like Google and Uber threaten to upend the industry by turning car owners and drivers into passengers who simply pay for a ride. And even though the carmakers and the region are developing tech talent, Silicon Valley is still ground zero for the people who write code, create driverless algorithms and come up with new business models.
Ford has invested in Velodyne Lidar Inc., which develops the laser-based sensors that are the eyes of self-driving cars, and 3-D mapping company Civil Maps, both in California. The Dearborn, Michigan-based carmaker also acquired SAIPS, an Israeli-based computer vision and artificial intelligence designer, and it reached a licensing agreement with Nirenberg Neuroscience LLC. Its founder has developed a machine-vision platform that Ford said can bring humanlike intelligence to self-driving cars.
Michigan isn’t giving up on talent, Governor Rick Snyder said in June.
Snyder said one of Michigan’s biggest challenges is getting the word out that it has great resources for technology companies, especially in the auto industry. With the University of Michigan focusing on software and technology development, the talent and education system is available for any company, he said..
Plus the state has much lower costs of living and doing business than California, especially with real estate prices rising fast in Silicon Valley. Detroit’s unemployment rate is 5.8 percent compared with 4.1 percent in the San Jose, California area, according to the Bureau of Labor Statistics
Snyder in June unveiled Planet M, an advertising and marketing campaign to tell technology companies that the state has the education and industrial base to be home to new auto technology research and start-ups.
“If you look at any place in the world, we have highly developed building blocks,” he said. Bloomberg