Auto CEOs Refuse to Wave a White Flag to Silicon Valley

Despite Silicon Valley’s aggressive attempts to take over, it’s way too early to give up on traditional global centers of the automotive industry for hosting the future era of the self-driven car.

gettyimages-533243370-compressor-2That’s the message being conveyed, at least, by car-company executives—as well as by the actions of some of the key players involved in reshaping the industry around autonomous cars and mobility services.

As traditional automakers double down on their own self-driving efforts, including buying up digital-tech startups and beefing up staff in Silicon Valley, the pendulum in Silicon Valley seems to have swung a bit.

In recent weeks, Apple may have abandoned its efforts to build its own car, in favor of coming up with just self-driving software, while Google also has retrenched with similar ambitions. Among other things, they apparently were daunted by the prospect of having to put together their own factories and supply chains to mimic what auto companies have been doing for decades: building actual automobiles.

“The old conversation I used to have was, ‘You guys are going to end up being the handset; you’re going to be low-margin assemblers of other people’s cool technology.’ We don’t want to be the handset. We won’t be.” —William C. Ford Jr.

“There was this presumption that we were too dumb to get it,” William C. Ford Jr., Ford’s executive chairman, told Automotive News, who notes that the conversation has really shifted. “The old conversation I used to have was, ‘You guys are going to end up being the handset; you’re going to be low-margin assemblers of other people’s cool technology.’ We don’t want to be the handset. We won’t be.”

In Tokyo, another major automotive center, there’s similar new bluster. “Many say carmakers have no future, and that they will become commodity producers, because Google, Apple, Microsoft or Tesla will take the lead in the automotive business in the future,” Didier Leroy, an executive vice president of Toyota, told reporters recently. “Do you believe we will just open the door and say go ahead? No, we won’t let them come inside like that.”

Meanwhile, Toyota is currently executing its promised move of its North American headquarters to Plano, Texas, from Torrance, Calif. A big focus for the new North American headquarters, as Toyota hires more than 1,000 new people, is to “address mobility challenges” as the industry shifts more heavily toward self-driven automobiles, and ride-sharing and other services, as well as electrified vehicles, Jim Lentz, CEO of Toyota’s North American operations, told Chief Executive.

Californians made quite a bit out of the fact that Toyota was moving to Texas, of all places. Lentz noted that “Texas didn’t poach us, which is what most people believe. But there’s still this friendly, sometimes not-so-friendly, competition going on between California and Texas.”

One thing that has changed in the last two years: Oil prices have slid dramatically, and that is starting to nick the Texas economy. But Lentz said that factor hasn’t helped Toyota much in Dallas, where demand and competition for white-collar workers of all stripes continues to be torrid.

Just for good measure, Toyota also is spreading the wealth regionally when it comes to its own development of self-driving systems and other technologies for the future. Toyota Research Institute has three offices: one at Stanford University, one at MIT — and one in Ann Arbor, Michigan.


MORE LIKE THIS

  • Get the CEO Briefing

    Sign up today to get weekly access to the latest issues affecting CEOs in every industry
  • upcoming events

    Roundtable

    Strategic Planning Workshop

    1:00 - 5:00 pm

    Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process

    Executives expressed frustration with their current strategic planning process. Issues include:

    1. Lack of systematic approach (70%)
    2. Laundry lists without prioritization (68%)
    3. Decisions based on personalities rather than facts and information (65%)

     

    Steve Rutan and Denise Harrison have put together an afternoon workshop that will provide the tools you need to address these concerns.  They have worked with hundreds of executives to develop a systematic approach that will enable your team to make better decisions during strategic planning.  Steve and Denise will walk you through exercises for prioritizing your lists and steps that will reset and reinvigorate your process.  This will be a hands-on workshop that will enable you to think about your business as you use the tools that are being presented.  If you are ready for a Strategic Planning tune-up, select this workshop in your registration form.  The additional fee of $695 will be added to your total.

    To sign up, select this option in your registration form. Additional fee of $695 will be added to your total.

    New York, NY: ​​​Chief Executive's Corporate Citizenship Awards 2017

    Women in Leadership Seminar and Peer Discussion

    2:00 - 5:00 pm

    Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations. 

    Limited space available.

    To sign up, select this option in your registration form. Additional fee of $495 will be added to your total.

    Golf Outing

    10:30 - 5:00 pm
    General’s Retreat at Hermitage Golf Course
    Sponsored by UBS

    General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.

    The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.

    To sign up, select this option in your registration form. Additional fee of $295 will be added to your total.