What "Detroit" Means
Not all that long ago, it seemed as though “Detroit” was no longer going to be synonymous with “capital of the auto industry.” Not only was this predicated on the Troubles that Two of the then-Big Three were having (and remember when there was a shift from “Big Three” to “Detroit Three,” signifying that it is pretty difficult to ignore the likes of Toyota, Honda and Nissan, when they were showing their strengths in the U.S. market?), but because, in many ways, there seemed to be a growing sense of irrelevance of what the Three were putting out in the market.
“Detroit,” not in the city, but what the name stands for vis-à-vis the auto industry, seemed to be on its way to the scrap heap of history, with people looking to places like Stuttgart and Tokyo rather than to southeastern Michigan. (OK: the city was on its way there, too.)
But “Detroit” isn’t just those big companies. “Detroit” is really the people in the industry, the people with skills, talent, and commitment to driving forward great products in spite of what obstacles (generally taking the shape of Management) may stand in their way. Peter DeLorenzo, of Autoextremist.com, refers to these women and men as “True Believers.”
And they are.
While there is a lot of continuing discussion about the wonders that are occurring in Silicon Valley, about what Apple and Google and Facebook are up to, again it is not the organization that is essential, but the people with the aforementioned abilities, although in this case the abilities are more typically focused on things of a digital nature than related to cars and trucks. (Of course, this is not to overlook the existence of Tesla, the fact that Apple and Google both have products specifically designed for the auto industry, and companies like NVIDIA that are developing processors to drive displays and provide the means to achieve sensor fusion in vehicles.)
Why do cool things come out of Silicon Valley in a way that they don’t come out of other places? Because that is where the cool, smart people congregate and are organized into companies.
Why does “Detroit” matter? Because there is a critical mass of people there who have automotive chops that are unlike those found anywhere else in the country, and quite possibly the world.
This came to mind because of two announcements, one on Monday, August 25th, and the other on Tuesday, the 26th.
On the 25th, Robert Bosch LLC had a groundbreaking in Plymouth Township, a suburb west of Detroit, for a 220,500-square foot expansion of its technical center there. The existing tech center opened in 2007. When the $40-million expansion is complete in late 2015, Bosch will have 445,000-square feet of facilities for research and development of automotive electronics, start/stop motor, electrical drives, and safety and driver assistance systems.
They will have the capacity to house 1,400 people.
At the groundbreaking, Mike Mansuetti, Robert Bosch LLC president, said, “For a company whose heritage—and future—is based on innovation, breaking ground to begin the expansion of this technical center at a time when this market offers so much potential to grow is truly exciting.”
Realize that Bosch, which has a global footprint that is as massive as almost any company you can think of, could have put a tech center anywhere. In this case, the company recognized the power of “Detroit.”
The following day, Toyota announced that it is undertaking plans to expand its footprint in York Township, Michigan—again, southeastern Michigan—where it operates its Toyota Technical Center. Presently, it has 350,000-square-feet under roof for engineering and design and a 180,000-square-foot safety test facility there. In addition to which, it has 559,000-square feet of facilities in nearby Ann Arbor. In Michigan it has approximately 1,000 people. The announced expansion will bring about 250 more people, in this case moving them from Erlanger, Kentucky.
As you may recall, in April Toyota announced that it was going to be moving its headquarters from Torrance, California, to Plano, Texas, and consolidating other offices in Plano, as well.
It’s facility in southeastern Michigan runs counter to that.
In relation to the announcement of the York Township expansion, Osamu Nagata, president and CEO of Toyota Motor Engineering and Manufacturing North America, said, “Growing our footprint in the design and engineering center of the U.S. automotive industry will enhance our ability to engage, support and partner with our key suppliers, the majority of which are located in southeast Michigan.”
The “design and engineering center of the U.S. automotive industry.”
That’s what “Detroit” means.
For conducting business in the U.S. market, Toyota has historically had several separate business entities: a sales and distribution company headquartered in California (Toyota Motor Sales, USA); manufacturing operations (Toyota Motor Manufacturing North America); a racing subsidiary (Toyota Racing Development, USA); the Toyota Technical Center for R&D in Ann Arbor; and a design facility in California (Calty Design Research, Inc.). On April 1, 2006, Toyota merged its R&D operations and its manufacturing operations into a single company.
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