The writer, a Los Angeles freelancer and former Detroit News business reporter, writes a blog, Starkman Approved.
By Eric Starkman
Say one thing for Google: launching Waymo’s robotaxis in Detroit shows a level of corporate chutzpah that borders on contempt. It embarrasses GM CEO Mary Barra in her own backyard and further diminishes Detroit’s identity as America’s automotive capital.
Waymo has come into its own, no small thanks to GM’s Barra, who last year shuttered GM’s Cruise subsidiary that many once considered ahead of Waymo. Barra, who manages GM for Wall Street and lacks the conviction to follow through on her much touted zero emissions vision, abruptly closed Cruise because she said the business wasn’t “core” to GM and offered no near-term payoff.
Bloomberg in 2022 pegged Cruise’s value at $30 billion, and a prominent Silicon Valley investor says Waymo is poised to become worth trillions because it faces no serious competition with its experience and track record. Google choosing Detroit for its first Midwest expansion is akin to Ohio State beating Michigan at the Big House in Ann Arbor and then holding a victory parade on State Street in Ann Arbor.
Jacob Tretter (LinkedIn photo)
Adding to the embarrassment, one of Waymo’s most visible local technical leaders is Jacob Tretter, who previously worked at GM on the pioneering Chevy Volt hybrid and later did a stint at Cruise out of GM’s Tech Center in Warren. Tretter holds a Master of Engineering Degree from the University of Michigan and an undergraduate degree in mechanical engineering from Michigan Technological University.
So much for Barra’s claim that the best technology talent is in San Francisco, a view not shared by Daimler Truck’s Torc autonomous trucking subsidiary, which announced in June that it was opening an engineering facility in Ann Arbor to tap the region’s “wealth of high-tech talent.”
Especially Galling
What Detroiters should find especially galling is that Waymo will be using electric vans manufactured in China by Zeekr, a luxury EV startup that did not exist five years ago. Zeekr is backed by Geely Automobile Holdings, which also owns Volvo Cars.
Electric car by Zeekr (Company photo)
The Biden administration, on its way out the White House door, effectively banned the sale of Chinese made electric vehicles, ostensibly to protect Americans from being secretly spied on by that country’s communist government.
“Imagine if there were thousands or hundreds of thousands of Chinese connected vehicles on American roads that could be immediately and simultaneously disabled by somebody in Beijing,” then commerce secretary Gina Raimondo warned last year.
Biden, who reportedly was close to Barra and whose top aide was a former GM lobbyist, did not move to ban the sale of Chinese made gas engine vehicles like GM’s Buick Envision and Ford’s widely praised Ford Nautilus. Waymo circumvented the Commerce Department restrictions on the grounds that all the connected tech on its Waymo vehicles is American sourced and fitted.
Google’s Privacy Violations
Frankly, consumers should be more concerned about Google spying on them.
The company in 2023 quietly settled a $5 billion class action lawsuit that accused it of secretly tracking the internet use of people who believed they were browsing privately. Google agreed to pay $1.4 billion last May to settle allegations it violated the privacy rights of Texas residents, and a California court in September ordered the company to pay $425 million in compensatory damages after finding that Google violated user privacy.
GM, which Barra fashions as a tech company, is also facing state attorneys general and class action lawsuits alleging privacy violations based on enterprise reporting by the New York Times. Notably, Barra has a soft spot for Google alumni. GM’s chief people officer, Arden Hoffman, previously worked at Google, as did Lin Hua Wu, who oversees marketing and corporate communications.
Waymo’s decision to bolster an upstart Chinese EV maker and use its vehicles on the streets of Detroit is a fresh slap in the face of Detroiters given how it reneged on a $13.6 million manufacturing commitment to the city and its promise to create four hundred engineering jobs in the city. Waymo's 200,000-square-foot factory was hailed as a major victory in Michigan’s quest to be a next generation mobility hub.
“Waymo could have located the world’s first one hundred percent dedicated Level Four autonomous vehicle factory anywhere,” crowed Mayor Mike Duggan. “We deeply appreciate the confidence the Waymo team are showing in the Motor City.”
Added mortgage mogul and developer Dan Gilbert, whose real estate company worked with Waymo to find its factory space: “Waymo’s newest expansion only helps to affirm Detroit’s position as the startup hub of the Midwest, making our city synonymous with high tech innovation.”
Factory Closure
As reported by Kurt Nagl, an ear to the ground manufacturing reporter with Crain’s Detroit Business, Waymo along with its Canadian based automotive supplier partner Magna earlier this year quietly closed the factory leased from American Axle and Manufacturing in the first quarter.
Waymo’s Detroit factory was supported by a $2 million grant from the Michigan Economic Strategic Fund that paid $24,000 for the first one hundred jobs created at the Magna plant. Waymo then qualified for an additional $6 million in MEDC grants.
Waymo’s project never even came close to meeting its promised job creation goals, Nagl reported. At its peak, there were sixty employees who were on Magna’s payroll doing contract work for Waymo, Magna spokesman Dave Niemiec told Nagl. Most were transferred to Waymo’s office in Novi, which opened in 2016, or other Magna divisions in southeastern Michigan.
MEDC spokesman Otie McKinley told Nagl that Waymo was in the process of repaying some of its grant due to not meeting job creation goals, but he didn’t specify how much money would be returned.
Another Slap in the Face
In yet another slap in the face of Detroiters, GM built its Cruise autonomous vehicles at GM’s Factory Zero plant in Detroit, the opening of which President Biden and Gov Gretchen Whitmer attended.
“Folks, when you see these projects starting in your hometowns, I want you to feel the way I feel,” Biden beamed while attending the opening. “Pride in what we can do when we are together as the United States of America and it starts here in Detroit. In the auto industry, Detroit is leading the world in electric vehicles.”
Biden cited the opening of Factory Zero as a monumental step reversing China’s leadership role.
“For most of the twenty first century we lead the world by a significant margin because we invested in our people, we invested in ourselves,” Biden said. “But something went wrong along the way. We stopped. We risk losing our edge as a nation, and China and the rest of the world are catching up. We are about to turn that around in a big way.”
More GM Layoffs
General Motors has scheduled 1,140 employees at Factory Zero for permanent layoffs effective January 5 after previously saying the layoffs would be temporary. Given that Factory Zero builds its EV Hummer monstrosity and other costly electric trucks and SUVs, Detroiters would be wise to prepare for another GM slap in the face given that Ford is reported to be mulling discontinuing its EV Lightning F150 pickup, the first and still best-selling electric truck in America.
Meantime, Waymo gave Arizona the last laugh at the expense of Detroit and Michigan. The company announced in May that it had made a multimillion-dollar investment in a 239,000 square foot plant in the Phoenix suburb of Mesa with its Magna partner that had created hundreds of jobs.
“The new Waymo and Magna manufacturing facility in Mesa is the latest example of Arizona being the new home for technology to innovate and grow,” said Arizona Governor Katie Hobbs. “I am proud to see autonomous vehicles on our streets every day, helping get people where they need to be safely. The new manufacturing facility will enhance this presence, and the local jobs it is creating will help Arizona’s tech economy continue to rise on the world stage.”
Wintry Conditions
A Waymo Vehicle (AI Illustration for Deadline Detroit)
Waymo has been operating in Phoenix for years. Detroit marks Waymo’s expansion into a city with wintry conditions, so its Motown success is critical. In another twist of irony, Tretter, Waymo’s technical director, said the company would focus on Detroit’s downtown dense urban core.
That includes Hudson’s Tower, where GM will maintain a satellite office of four floors that it officially calls its headquarters, even though it houses only a sliver of the company’s 162,000 employees. By contrast, the Tech Center in Warren has more than 20,000 employees, and even GM’s Austin tech center has 3,500.
The sight of Waymo vehicles on Detroit streets will serve as a constant reminder to GM employees of the myopia of the CEO now leading their professed technology company and of the former colleagues whose talents are instrumental helping Waymo achieve its accelerating success.
Starkman can be reached at eric@starkmanapproved.com Anonymity assured and protected.
