U.S. carmakers seek talent in Silicon Valley
Auto companies looking outside traditional manufacturing centre in race against Google, Uber
For the first time in America’s industrial history, the centre 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 (U.S.) in investments made by Detroit-based General Motors Co. in a pair of California technology companies earlier this year to keep up with Google’s autonomous-car project and Uber Technologies Inc.’s ride-booking business.
While the old-school mechanical engineering remains in the Midwest as does low-skilled factory work that hasn’t moved to Southern states, these investments show Detroit carmakers have realized that they must go to the nation’s technology centre to find the software expertise needed to make the autos of tomorrow.
Traditional automakers now directly employ hundreds in Silicon Valley, Calif., which is also home to Palo Alto-based Tesla Motors Inc.
“The shift to California is undeniable,” said Eric Noble, president of the CarLab-consulting firm in Orange, Calif. “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 state of Michigan 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 for mobility.
Ford has invested in Velodyne Lidar Inc., which develops the laser-based sensors that are the eyes of self-driving cars, and 3D mapping company Civil Maps, both in California.
The Dearborn, Mich.-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, Dr. Sheila Nirenberg, has developed a machine-vision platform that Ford said can bring humanlike intelligence to self-driving cars.
“We came to Silicon Valley — there are a lot of great places around the world — but the ecosystem here is just unbelievable,” Fields, standing outside on a bright, sunny day, said to reporters. “It’s like a bazaar of ideas, and everybody’s open.”
GM CEO Mary Barra last year took her top leaders to visit tech companies and venture capital firms to get their thoughts on fostering innovation.
GM went on to buy a 9-per-cent stake in Lyft Inc., a competitor to Uber, for $500 million. GM also spent more than that to buy San Francisco-based Cruise Automation, which writes the software for autonomous driving.
Owning Cruise, which has grown from 40 employees to 100, has helped GM hire people who may not have been interested in working for an automaker, Mike Ableson, GM’s vice-president of global product planning, said in a June interview. Some people want to remain in the California environment but also have the stability of a large company, he said.
Similarly, Ford’s announcement may have been intended to present the maker of F-150 pickups look like an “exciting destination for human talent,” Adam Jonas, an analyst at Morgan Stanley, said in a research note.
“There is at least a perception in the market that all the cool kids are going to places like Uber,” Google, Tesla or China, he wrote. Ford and other automakers “want to change this.”