Motor City Detroit once again behind the steering wheel?! –
Mobility firms in search for production sites seem to land at an all-time classic of the automotive industry
Alphabet’s Waymo announced to mass produce self-driving vehicles in Detroit, Michigan by end of 2019. This decision was made end of April, but expected since quite some time.
Waymo takes another important step into the field of automotive manufacturing (although relying on externally produced cars) and expands its capabilities from self-driving technology to retrofitting their sensors and computation power.
Detroit, Michigan is an interesting choice – given the regions historic downturn from 296.000 manufacturing jobs in 1950 to around 20.000 in 2015 – it has a ‘back to the routes’ of manufacturing character.

Waymo is planning to open its manufacturing plant mid 2019 and is therefore partnering up with American Axle & Manufacturing to repurpose an already existing facility which was used as a sequencing centre for a local parts supplier in earlier years.
The purpose of the plant is to equip all-electric Chrysler Pacifica Hybrid minivans and Jaguar I-PACE vehicles with Waymo’s self-driving system, including hardware and software components, to expand the existing fleet (mainly Chrysler Pacifica Hybrid vehicles equipped with autonomous driving technology) to enable a ride-hailing service at scale.
Trying to offset a potential shortcoming in manufacturing experience, Waymo partners with Magna, one of the world’s largest Tier 1 suppliers manufacturing cars also for other automakers who is currently also building the Jaguar I-PACE at its factory in Graz, Austria. Furthermore, Waymo claims to draw from Detroit’s history and expertise in the field of car manufacturing, process sequencing and supply chain management.
In fact, Waymo seems to join a larger trend of revitalizing the Detroit region: Fiat Chrysler, GM and Ford Motor also announced large-scale investments in manufacturing factories in Michigan, mainly to build autonomous vehicles.
In a recent US market entry study for a large service supplier in the automotive industry, our experts reached a similar conclusion:
While our client was looking for a confirmation that he needs to go to Silicon Valley as this is where the big deals happen, our analyses have shown that in fact Detroit is the economic more viable option. Labour costs are significantly lower while at the same time, cluster effects are increasing starkly. As one of our senior experts phrased it: In Silicon Valley it’s all fancy offices and bean bags – once a player in the mobility field gets serious about mass production and is ready for the real deal, they move somewhere else, and apparently Detroit is among their first options.

References:
https://www.reuters.com/article/us-waymo-selfdriving/waymo-picks-detroit-factory-for-self-driving-fleet-to-be-operational-by-mid-2019-idUSKCN1RZ1IZ
https://qz.com/1602812/waymo-is-building-a-self-driving-car-factory-in-detroit/
https://cleantechnica.com/2019/01/23/waymo-magna-will-produce-self-driving-vehicles-at-michigan-factory/