With tech assets, can Austin become key player in automotive industry?

ByLaylan Copelin

AMERICAN-STATESMAN STAFF

Updated: 11:03 a.m. Sunday, March 11, 2012

Published: 8:59 p.m. Saturday, March 10, 2012

Austin officials – and Texas leaders, for that matter – are getting a touch of  car fever.

Not the desire to buy the latest models, but to help build them — or create  the next generation of high-tech vehicles.

A rebounding automotive industry has Texas lawmakers clearing the way for the  next competition for an assembly plant and Greater Austin Chamber of  Commerce officials intensifying their efforts to play a larger role in the  global automotive industry, especially as technology changes how consumers  think about vehicles.

“Cars are changing; the industry is changing,” said Adrianna Cruz,  vice president of global corporate recruitment at Opportunity Austin, the  chamber’s economic development arm.

“Even though traditional manufacturing is something we’re going to target,”  Cruz said, “Austin could also play a huge role as cars become smarter,  cleaner and safer.”

Cruz said Austin can leverage its technology base, the University of Texas’  research muscle and the city’s lifestyle to capture at least a piece of the  auto industry.

It doesn’t hurt that Texas already has a strong foothold in auto manufacturing  with plants in Arlington and San Antonio, easy access to Mexico’s  manufacturing base, and state leaders interested in expanding Texas’ role in  vehicle manufacturing.

Texas House Speaker Joe Straus — who hails from San Antonio, which landed  Toyota’s truck assembly plant in 2003 — has ordered lawmakers to be sure  Texas has no impediments to competing for future opportunities.

He said he took that step after a group of industry representatives, including  former state senator and General Motors executive John Montford, met with  him last summer.

Those ambitions lead to the question: Could Austin — or Texas — become the  next Detroit?

“The next Detroit? That’s pretty grandiose thinking,” said Kim Hill  with the Center for Automotive Research in Ann Arbor, Mich.

Even in the wake of competition from Southern auto plants, recession,  bankruptcy and bailouts, almost half of the nation’s automotive jobs remain  in Michigan, Indiana and Ohio, according to the Bureau of Labor Statistics.

Eleven of the 12 automakers, including the Big Three’s foreign competitors,  have major research and development centers in Michigan.

Many of the industry’s parts suppliers also have their corporate headquarters  in the Midwest.

“Much like Hollywood is to the film industry, Detroit will probably  always lead the nation’s auto industry,” said Greg Burkart, managing  director of the Detroit office of Duff & Phelps, an investment banking  firm that works closely with the automotive industry.

Connections to industry

That’s not to say Hill and Burkart don’t see Austin’s and Texas’ potential as  an automotive industry center.

“Attracting an assembly plant is a once-in-a-lifetime event,” Hill  said. “But the technology end is going to only get bigger and bigger.”

Burkart said “innovation clusters” such as Austin, Raleigh-Durham,  N.C., and Silicon Valley in California could develop their own highly  advanced automotive industries.

“And because many of these regions are highly desirable places to live  and work, Detroit, Germany, Japan and Korea may be forced to ‘come to them’  to remain competitive,” he said.

Vehicle sales in the U.S. shrank dramatically during the recession, from a  production high of 17 million vehicles in 2007 to a low of about 10 million  a couple of years later.

Several plants were shuttered in response, but this year vehicle sales are  projected to reach about 14 million, as auto executives wring as much as  they can from existing plants.

Expansion — at least for some manufacturers — is on the horizon. Foreign  production, in particular, might be shifted to the U.S. because of rising  sales and a weak dollar.

Hyundai’s popularity is straining the capacity of its Alabama and Georgia  plants, Hill said, and Audi is weighing opening a North American facility.

Honda and Toyota, once they’ve recovered, might expand operations in the  United States, Hill said.

Texas already has a large role in vehicle manufacturing. In 2010, the state  ranked sixth nationally for automotive manufacturing employment, according  to the Bureau of Labor Statistics, with plants building everything from cars  to trucks to military vehicles.

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BMW iVentures Opens Incubator in West Village

February 1, 2012, 4:39 pm

BMW Plants Seeds of Silicon Valley in the West Village

By PHIL PATTON
Attendees at Tuesday's panel discussion and opening party for the BMW iVentures incubator in Manhattan.

Peter Morehand/BMW iVenturesAttendees at Tuesday’s panel discussion and opening party for the BMW iVentures incubator in Manhattan.

BMW iVentures, an investment arm begun in tandem with the automaker’s i subbrand, has established a start-up incubator on Morton Street in the West Village.

The space was inaugurated with a party and panel discussion on Tuesday. With the brand’s recent dalliances in smart-grid management in Mountain View, Calif., and the incubator opening party, the German automaker seems to be smitten with the Silicon Valley life.

At the party, panel speakers were expected to discuss “how digital technology can change, improve, disrupt, enhance and perhaps revolutionize mobility,” but their musings were mostly muted by the networking and snacking din.

The i subbrand is primarily oriented toward developing advanced-powertrain vehicles, like the i3 electric urban runabout, and more sustainable methods for producing them. BMW iVentures complements that image by nurturing or acquiring stakes in digital services related to efficient urban mobility.

The incubator, befitting an ascetically minded start-up, consists of an open floor space and a back room which, during the party, was filled with men working at computers and wearing expressions that suggested they didn’t intend to partake of the yellowtail sashimi.

Projects under the tutelage of BMW iVentures include the German car-sharing outfit DriveNow, the city-guide app developer MyCityWay and ParkatmyHouse, billed as the parking equivalent of Airbnb.

MyCityWay is the only iVentures-backed business in the incubator, but ParkatmyHouse is expected to move in shortly, Kenn Sparks, a BMW spokesman, confirmed in an e-mail Tuesday. In the meantime, start-ups that have not been directly financed by iVentures may still be invited to work in the space. “Financial arrangements are decided on an individual basis, and the use of the incubator space can be included in an iVentures investment,” Mr. Sparks wrote.

The incubator is headed by the managing directors Ulrich Quay and Alexander Diehl. BMW iVentures also plans to work with the New York University‘s Rudin Center for Transportation Policy, as well as the high-tech academic venture recently announced by Mayor Bloomberg, involving Cornell University and the Technion-Israel Institute of Technology.

http://wheels.blogs.nytimes.com/2012/02/01/bmw-plants-seeds-of-silicon-valley-in-the-west-village/

Ford to open Silicon Valley Lab

Ford is setting up a facility in Silicon Valley to tap into high-tech ideas.

By: David Phillips, Automotive News on 1/06/2012

Ford  Motor Co., aiming to keep ahead of technology trends, will establish a  research lab in the heart of California’s Silicon Valley.The automaker said Friday the lab will open near Stanford University in Palo  Alto, Calif., in the first few months of this year.Ford wants the lab to take on a start-up feel and expand beyond the  traditional automaker mindset to encourage innovation and improve mobility and  safety.

“Silicon Valley represents a deep and dynamic technology neighborhood and is  far from Dearborn,” K. Venkatesh Prasad, a senior technical leader at Ford  Research and Innovation, said in a statement. “With so many opportunities and so  much potential, our new lab will allow us to scout new technologies and partners  in their own environment.”

Ford said the hub will be staffed with about 15 people, including employees  recruited locally and others who will rotate in from Ford’s headquarters in  Dearborn, Mich.Chief Technical Officer Paul Mascarenas said the automaker decided about a  year ago that it needed a larger presence in Silicon Valley.”This is a very natural extension into one of the most innovative communities  in the world,” Mascarenas told the Associated Press.

The small research center will explore ways to better integrate phones and  other personal devices into light vehicles.The lab will also solicit and test applications from third-party software  programmers, Ford said.

Ford sees huge potential in using the car as a moving sensor. For example,  Ford is currently studying an app that would improve weather reports by  transmitting signals when a vehicle’s rain-sensing wipers are activated.

The new lab will work closely with engineers at Ford headquarters as well as  at its design studio in Southern California and offices at Microsoft Corp. in  Washington state.

Ford and Microsoft jointly created the automaker’s Sync voice-activated  entertainment system and My Ford Touch touch-screen dashboard. Ford introduced  Sync four years ago, but the feature has suffered from performance glitches and  quality setbacks.

Ford’s ranking in several third-party quality surveys has suffered as a  result.

Mascarenas told the AP it was important that the lab be in Silicon  Valley–not Dearborn–so employees can feel free to experiment.General Motors, BMW AG and the Renault-Nissan partnership also operate small research labs in the Silicon Valley area.Prasad told the AP that Ford considered opening a Silicon Valley office in  the past but the technology wasn’t ready.

He said the Sync platform now makes it simpler and faster to reprogram a car  and update it with new applications.

“The car is finally a platform,” Prasad told the AP.

Read more: http://www.autoweek.com/article/20120106/CARNEWS/120109920#ixzz1mDmKI6oW

PROGRAM

The goal of this project is to interlink or “stitch” back the city through a transformation of the automobile manufacturing industry. The city is like a quilt, with some patches in very poor shape and some doing quite well. These patches together form a quilt that is not functioning well. Some seams are loose, and are letting cold air in. Others do not have a strong connection to the patch next door, because either the stitches that hold them together are tattered and worn, or the patches do not complement each other. The quilt is bigger than just Detroit, it has stitches with the State of Michigan, the Rust Belt, and the greater planet as a whole. Once all of the stitches are working well with each other, the quilt can function properly.

The automobile industry in Detroit is tattered and needs a vision that will transcend it into the modern era. Automobiles of today are more about the looks, gas mileage and the gadgets in them than anything else. In the middle of the 19th century the automobile provided very little, mainly a way for transportation. Today, the automobile is becoming a mobile office and family entertainment center in addition to this mode of transportation that it has always provided. The automobile is more of a technological gadget than it ever has been. A greater number of electronic parts and instrumentation are jammed into automobiles every day, so much so that people who used to be able to work on their own vehicles are being forced to take them to a mechanic when they are having trouble. The auto mechanic is going to need an engineering degree in the future in order to work on these cars.

What is it going to take to pull Detroit out of the funk that the city has sustained over the last 40 years? Urban plans such as high speed rail, cultural museums, park space and the like have no chance of reviving the city’s pride and stopping the bleeding that is devastating the city’s urban core. Not to mention that the city has no money and is having to cut essential surfaces like police, fire and community services. What the city needs is a flood of ideas and innovation. This can be achieved through advancing the city into the digital age. The automobile manufacturing industry needs an infusion of digital technology, one that brings innovative advancement to the American car makers. These advancements go beyond the things we know today, they push the envelope and bring new creative blood to the design table. So how does this Technology Think Tank work?

In some instances, this type of process is often called a business incubator. Similar to a business incubator, this process will aid in the ushering in of ideas and creative mind-set that is necessary to maintain a business in today’s society. The only difference is that this incubation process focuses on the advancement of technology, which in turn should aid the progress of the business influenced by the process. For Detroit, the biggest downfall of the city has been the one-trick pony aspect of the manufacturing industry. Although the automobile industry has brought so much prosperity to the city, it has been the single issue with the exodus the city has experienced in recent years. The technology think tank will cultivate new ideas, which will immediately help the automobile industry, as well as usher in new industries to the city. This will provide an opportunity for diversification that is much needed in this region of the country.

How does this project work? The project starts with the introduction of a mobile think tank that is located in a degraded area of the city. The mobile structure is designed to quickly establish a presence in the city. During the time this mobile structure is established, a community committee establishes a consortium of members and stakeholders from critical organizations. This kick starts the process of creativity and gets people excited and invested into the process. Any and all interested people are invited to be involved in this process.

Following the establishment of the mobile technology laboratory, a permanent Technology Education Center is established that will provide long term support to the community through education, community outreach and collaborative support to industry. This collaborative effort provides much needed technological education to residents and cultivates a breeding ground for future innovators and entrepreneurs. The construction of the TEC utilizes vacant or abandoned space located around the mobile laboratory. The mobile laboratory and the TEC work hand-in-hand and feed off of each other. The presence of construction invigorates the team and in turn the think tank provides insight into the type of programs and education that is provided at the Technology Education Center.

This initial investment spent on TEC aids in the long-term reinvestment of the manufacturing industry, which in turn will aid in restoring the city fabric and reviving residential communities. Like an electronic circuit, all of these elements depend on each other and are interconnected through a network of necessary pieces such as education, funding, and inspiration.

What is the goal of the Technology Education Center?  The Technology Education Center is the lifeblood of this project. The TEC is designed to engage a collaborative effort between industry and education. The TEC is like a cooperative, educating employees of industry who can then provide innovation to the industry as a whole. This education gives more arsenal to those who work in Detroit who can then provide new industrial possibilities outside of the automobile industry. Detroit then becomes something more than just the Motor City. The intent is not to draw the city away from its roots, but rather revive and transcend the city beyond automobiles.

In his book “Triumph of the City”, Edward Glaesner says, “If Detroit and places like it are ever going to come back, they will do so by embracing the virtues of the great pre- and postindustrial cities: competition, connection, and human capital. The Rust belt will be reborn only if it can break from its recent past, which has left it with a vast housing stock for which there is little demand, a single major industry that is dominated by a few major players, and problematic local politics. Beneath these cities’ recent history lies an instructive older story of connection and creativity, which provide the basis for reinvention. To understand Detroit’s predicament and its potential, we must compare the city’s great and tragic history with the story of other cities, like New York, that have successfully weathered industrial decline.”

So much of the industry of Detroit is based on analog processes that have been perfected for decades. The education of digital technologies will infuse the city with new opportunities. The education at the TEC is meant to digitally transcend the manufacturing community, most importantly its people, into a fabrication community.

The community becomes less focused on the direct manufacturing of the vehicles and turns its attention to fabrication of parts and electronics that supplement the automobile industry. These parts can be put into American vehicles as well as exported to foreign auto makers, thus expanding the market. At the same time, these fabrication communities can cultivate new ideas that other industries are begging for. All of this provides the diverse community the city needs, provides a larger number of higher paying jobs to its residents, and prevents the elimination of the city through economic downturns.

Who are the partners?

The lifeblood of the project may be the TEC, but the success is solely dependent on the educational and industry partners that provide the resources and dedication to the process. The Technology Education Center is meant to be a collaborative effort of education and industry. Together the sharing of knowledge, resources and innovation can flow back and forth, each providing opportunities for the other, as well as advancing the education of the people of Detroit.

Detroit is blessed with education providers within its city limits as well as some just outside the city. Wayne State University is located just north of downtown. Detroit Mercy has a campus in the north region of the city as well as a satellite building located downtown. The University of Michigan has a campus located in Dearborn, just north of the Ford manufacturing plants. Additionally, there are opportunities for community colleges and high schools to get involved as the process grows.

Initial industry investments include Ford, General Motors, and Chrysler, all of which call Detroit home. Additional industry involvement will expand with the introduction of new technologies and interest in the Detroit region. Other manufacturing companies located outside of the city could include Dow Chemical, Whirlpool, Steelcase and Herman Miller.