Predictions for Michigan’s automobility industry is focus of MICHauto Roundtable

Seasoned automotive journalist and 2018 Michigan Journalism Hall of Fame inductee John McElroy opened the MICHauto’s annual Mackinac Policy Conference roundtable event with a dynamic presentation kicked off by a bold statement: the future of autonomous vehicles has already started.

“Let’s define what we are talking about. Level 5, I agree, is not around the corner, but Waymo offers fully autonomous rides for those who sign up, and nuTonomy is operational in Singapore,” says McElroy to a room packed with automotive professionals gathered in the Grand Pavilion at the Grand Hotel on Mackinac Island.

Critics will point out that the technology just isn’t ready yet, says McElroy. “Any kind of accident involving AVs makes not only national headlines, but headlines around the world. Fender benders made national news, and surveys show the American public is very leery of AVs,” he says. “This is a country that used to embrace technology, that was a leader in technology, and now we are afraid.”

Fears, however, are quelled through exposure. When SAE connected individuals with AVs for a trial run in Florida, 85 percent walked away so confident of the technology, they said they’d put their kids in a self-driving car. This was the same group that previously said they did not believe autonomous technology was ready.

John McElroy delivered his introduction to the roundtable event

McElroy deftly compared autonomous vehicle technology to public fears of flying in the 1920s. “PanAm learned that some were afraid of flying, and others were not. Today, just a small minority of people will not get in a plane,” he says, adding that headlines report tragedies that come from companies that are cutting corners to rush to the market first. Michigan’s rich and longstanding expertise in innovating, designing, and manufacturing safe and reliable vehicles puts our state ahead in the autonomous vehicle market.

As we move toward immensely popular car sharing and ride sharing models, how will this business change affect OEMs?

“One theory is that when vehicles log 80 to 100,000 miles in a year, they will wear out faster and require quicker replacement,” says McElroy. “I don’t believe this. If I’m a fleet owner, and want to operate a fleet of autonomous ride or car sharing services, I don’t want a car designed to last just 150,000 miles. The London cab is a good example of a purpose-built vehicle. Forty percent of all London cabs are 10 to 15 years old.”

Experts are split on their predictions regarding the impact of self-driving cars on the automotive industry itself. Some say more miles will be traveled, putting more cars will be on the road; others predict that one ride-sharing car will obviate the need for 15 vehicles.

“Barclays has predicted that by 2040, GM will cut their manufacturing footprint by 68 percent, and Ford will cut by 58 percent,” McElroy shares. “We can argue that this is an extremist view. I don’t agree with their timeframe but I do agree with the conclusion. We are moving to a future where we won’t need as many vehicles.”

A call to action for Michigan

McElroy’s call to action for Michigan, for the automotive industry, and for the country is to fight to keep what we have, yes, but to do more, as well.

“We need more testing on Michigan roads. We need to get citizenry on board for the future. We need to be brutally honest about fatalities and about job losses. We need to get the public exposed to the technology, really show them what is going on. And we need to expose the country to it too,” McElroy says.

But how do we get there? Creating a startup culture in Michigan is a great start, says McElroy.

“We need a convergence that starts with venture capital money. This is how Silicon Valley works,” McElroy says. “We have a lot of bright people here, we have the best research universities, we have a collection of the best R&D facilities in the world, mostly automotive. But we don’t have the kind of VC money, even the mindset of ‘hey, I have a great idea, I’m going to slap a plan together and go after these people for some seed money.’ We have got little bits of it, and it is growing a little bit, but we are not in the game in this state.”

The value of that startup culture, in some ways, lies in the tremendous learning that comes from failure.

“In a big corporation, you may fail and that may be the end of your career. In the startup culture, failure is a badge of honor. VCs even ask. They say ‘tell us about your failure.’ That is a stamp of approval. But they will also ask ‘what have you learned from your failures?’”

How Ford is attracting a new workforce

McElroy sat down with Rick Popp, director of human resources in North America for Ford Motor Company to talk talent. What is Ford doing differently to attract a new generation of workers?

Popp shares that increasingly, Ford is looking outside the box for talent, and working to change the perception of work in the automotive industry, which can be like a foreign language to those who didn’t grow up speaking automotive. In addition, Popp says Ford values bringing employees back after they have taken some time out of the workforce.

“Maybe they taught English as a second language somewhere, or stayed home to provide family support. We have hired some employees with autism as a great example of putting people in where they can succeed,” Popp says. He describes these workers as being particularly suited to “flat,” or predictable jobs within the STEM environment. So far, Ford has hired four individuals with autism.

John McElroy talks with Rick Popp, director of human resources, North America, with Ford Motor Co.

Increasingly, agility is a skill Ford is looking to maximize. “Even with white collar jobs, we have the flat job mentality. There is an assignment, and you meet the objectives, but that is not reality. We are moving more to the consulting-type role that definitely changes with the industry, and with what is needed that week, even. And that includes you as an individual, and what makes you tick. If you coach youth sports, build that into your job structure. We don’t build in flexibility nearly enough,” Popp says.

The balance between the elements of direction and personal freedom translates into point-of-view ownership. “It’s a competitive world. We need to be more loose, and less formal. We are moving away from episodic performance reviews, and more toward check-ins,” he says.

“Everyone wants to have joy at work, and make a difference in the world, to like their teammates, and be recognized for doing a good job.”

Focus on the present and future workforce

The final event of the MICHauto Roundtable was an open panel discussion, moderated by Mike DiClaudio, principal, Advisory Services with KPMG. DiClaudio talked with Adam Dramer, executive vice president of strategy with Switch, Ronia Kruse, CEO and co-founder of OpTech, Jeff Makarewicz, group vice president of vehicle, quality, and safety engineering with Toyota Motor North America, and Chris Thomas, founder and partner of Fontinalis Partners.

Here are key takeaways from their discussion.

Mobility disruption is a wakeup call for Michigan. This disruption has caused Toyota North America to rebuild and reform, with a reinvestment in technology to establish the Toyota Research Institute, and move powertrain development from California to Michigan, to co-locate with prototyping. “Now we have design, development, procurement, and prototype testing all in one facility,” says Makarewicz.

Michigan needs to work hard to educate, attract, and retain STEM talent. Eighty percent of organizations report that the digital disruption is among their biggest workforce challenges, yet only seven percent report being ready to take on the challenge. “We need to get K-12 students excited, and supply career role models. Many schools are doing a great job, and involving Michigan Council of Women in Technology and Inforum,” says Kruse. Still, students are finding their degrees are irrelevant after four years of study, and international students--the vast majority of whom study electrical engineering and computer science--are not able to remain here because they are not being sponsored. “We need to be proactive and retain the talent we have,” Kruse says.

Next-generation mobility is not Michigan’s birthright. We have to move quickly and shift our focus from talent retention to talent creation. As a start, there is a “new organization called the Detroit Mobility Lab working to create the Mobility Institute,” says Thomas. While Michigan leads in testing innovation, testing is the “end of the food chain. It’s what we do when we are done. I’d trade that for any aspect of [a talent focus] on earlier in the chain. We should invest in companies that are doing that,” he says. Finally, we need to be sure students can gain the skills they need here in Michigan. Thomas points to nuTonomy, funded by Fontinalis Partners, and founded by Detroiter Karl Iagnemma. “He went to MIT because U-M didn’t have the degree he needed,” Thomas says.

Programs like FIRST Robotics create more than STEM talent. “FIRST is the single best program out there for training the workforce,” says Kramer. “We will be building our own FIRST center in Nevada and Grand Rapids. Today, we are training people for jobs that don’t yet exist, with tools that are 10 years old. But FIRST creates that desire to continue learning and commit to self-discovery.”
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