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Tech investments highlight region’s role in auto makeover

From: Crain’s Detroit Business

By Dustin Walsh

September 20, 2014

Southeast Michigan is at the center of the automotive industry’s reinvention, for the second time.

This time, though, that reinvention is all about the connected car and vehicle safety and efficiency features.

General Motors Co., only moments before CEO Mary Barra took the stage at Crain’s Detroit Homecoming event this past week, announced it would build a new “top-end, high-technology” Cadillac at its Detroit-Hamtramck assembly plant next year.

GM has invested more than $1 billion in the plant over the past five years. Over the past several weeks, GM has installed tools and equipment for the new car, part of a $384 million investment. The plant employs about 1,600 workers on one shift, a GM spokesman told Automotive News.

At the Homecoming event, Barra dodged questions about the new Cadillac’s name or technology.

Earlier this month, GM announced that the 2017 Cadillac CTS would come equipped with vehicle-to-vehicle communication and adaptive cruise control, called “super cruise.” Adaptive cruise control autonomously controls the vehicle’s acceleration, steering and braking on the highway.

Barra made the announcement at the ITS World Congress 2014 on Sept. 7 at Cobo Center.

“No other suite of technologies offers so much potential for good, and it’s time to turn potential into reality,” Barra said at the event.

Many Southeast Michigan suppliers also continue to innovate with autonomous technologies, including Livonia-based TRW Automotive Holdings Corp., Auburn Hills-based Continental Automotive Inc., Northville-based IAV Automotive Engineering Inc. and many others.

Since 2010, automakers and suppliers have invested more than $12 billion in the state, according to data collected by industry group MichAuto. That’s following the economic downturn of 2008-09 that led to a slump in car sales, rampant job cuts in the auto sector, and federal bailouts.

Nowadays, however, auto is on the rebound.

Ford Motor Co. continues its plan to invest nearly $800 million in six of its plants in Southeast Michigan. Southfield-based supplier Lear Corp. invested more than $18 million in a new plant in Highland Park.

But it’s also technology, said Michael Robinet, managing director of automotive consulting for Southfield-based IHS Automotive Group LLC.

“There’s no doubt that the anchor for automotive technology is the continued infrastructure investments the automakers are placing in engineering, design and research,” Robinet said. “The need for more connected, lighter and safer vehicles has provided an enormous challenge to the industry, which has created new infrastructure investments to deliver … much of it here in metro Detroit.”

The ITS event, which brought together technology and automotive companies to Detroit for the first time, showed why Detroit belongs on the world stage, said Glenn Stevens, vice president of the Detroit Regional Chamber’s MichAuto organization and strategic development.

“There is no greater concentration of future mobility research done anywhere else in the world,” Stevens said. Stevens said the investment and attention the state and metro Detroit are receiving stems from the cohesive effort from the region’s stakeholders.

The regional chamber unveiled MichAuto, its statewide automotive economic development group, in 2012.

Last year, Gov. Rick Snyder named Nigel Francis, a former Mercedes-Benz AG vice president, as the state’s first car czar, in charge of aiding in economic development. Francis’ official title is senior automotive adviser for the state of Michigan and senior vice president at the Michigan Economic Development Corp.

While local government agencies have jelled, the federal government has possibly played the biggest role in the industry’s revitalization, Robinet said.

Investment include those like the $148 million American Lightweight and Modern Metals Manufacturing Innovation Institute, which will locate this fall in a vacant 99,000-square-foot Corktown building.

The institute — led by the University of Michigan, Columbus, Ohio-based manufacturing technology 501(c)(3) nonprofit EWI and Ohio State University — will be funded with a $70 million, five-year grant from the U.S. Department of Defense and $78 million from a consortium of 70-plus universities, businesses and organizations.

Also, the UM Transportation Research Institute, along with the U.S. Department of Transportation, is in the midst of a more than $31 million study to analyze vehicle connectivity.

The UMTRI Safety Pilot program, which has existed since 2012, includes the deployment of cars, commercial vans, buses and motorcycles equipped with transmitters and data-logging devices to track position, acceleration and velocity to vehicles and infrastructure.

The program will outfit 9,000 vehicles for the study.

Much of the private-sector investment is to capitalize on the recovered car market — automakers are expected to sell more than 16 million cars this year.

Since 2010, automakers and suppliers have invested more than $12 billion in the state, according to data collected by MichAuto.

A large portion of that investment, however, has been to expand technologies and auto capabilities driven by regulation.

“There’s no doubt that technology used to be driven by consumers, but now it’s truly driven by legislation,” Robinet said.

Automakers must meet CAFE regulations of 54.5 mpg average across its fleet by 2025. This has led to innovations in lighter materials, a host of gas-saving technologies and alternative powertrains.

Plus, the National Highway Traffic Safety Administration is preparing to weigh in on safety regulations including vehicle connectivity, autonomous driving and more.