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



By: Claire Charlton

June 15, 2018

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.

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?’”

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Chris Thomas is a 2018 MICHauto Summit speaker. View the full agenda and register for the event.


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