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Why Silicon Valley Won't Be the Green Car Detroit
thecarchik writes "NPR boldly pronounced, 'The new automobile of the 21st century is likely to benefit from the culture of Silicon Valley, where people are used to taking a chip, a cell or an idea and working on it until it becomes something big.' We've thought about it for a year, and discussed it with many people. And we don't believe it. Silicon Valley is the wrong place to build an auto industry, for three main reasons."
That's reason number one. That's the last place I'd want to build an industry, not just because of me but also my workers would have to deal with the heavy tax burden.
Better someplace that has few taxes & doesn't steal (much) money from the workers' paychecks. Like one of the Carolinas.
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>>>Feedback on this comment system?
Yeah it sucks. And it's slow (CPU intensive). And I can't get back to the classic (plain text) index even though I've un-checked and checked it multiple times.
"I disapprove of what you say, but I will defend to the death your right to say it." - historian Evelyn Beatrice Hall
The same problems exist in the energy domain as well. California has steadily been making the state hostile to actual manufacturing, the technical domains (bioengineering, mechanical engineering, materials science) are only superficially relevant to Silicon Valley's prime skill set (microlithography, electrical engineering), and the business model is way off (what? There's no exit strategy? You mean we have to actually OPERATE THIS THING OVER THE LONG HAUL?).
Dog is my co-pilot.
What's funny is how they create bogus metrics to support how wonderful our state is. The one I see most often that really irritates me is the BTU/citizen. They'll state it in a few different ways, but basically they're claiming that because we use less energy per citizen our state is more efficient than everywhere else, but what the metric is really demonstrating is that we have no manufacturing here. Factories require gobs of electricity.
I once took an excursion to Reddit, and later HN. Unlimited up/down voting sucks when dealing with a hive-mind.
TFA is saying that one of the reasons the valley won't manufacture cars is because they'll have to import engineers from elsewhere since the ones already in the place are only qualified in microelectronics and aren't qualified in the heavy duty engineering needed for manufacturing.
Silicon Valley's already full of imported engineers who were brought in to work as coders. I'm one of them. I don't see why they couldn't import the necessary skills. The valley is a very attractive proposition to someone living in India, or in England as was the case for me.
Drill baby drill - on Mars
Tesla has the advantage of taking over the NUMMI plant in Fremont, CA, a big, successful auto plant shut down for the 2008 recession, when Toyota, for the first time, had to close plants. They're only using a fraction of the plant, but they own all the buildings (although not all the land; they didn't buy all the parking lots). There are plenty of laid-off auto workers living nearby, so a workforce is available.
The cost differential with China has narrowed. It turns out that once wages in China reach a quarter of the US level, China manufacturing stops being competitive. The transport costs, the delays, and the quality problems make outsourcing manufacturing less attractive. With wages rising in the coastal provinces in China, (and wages dropping in the US) that wage level has been reached in some industries.
Also, with all the foreclosures, bay area house prices have dropped. Maybe by a factor of 2.
Operating in Detroit has its own problems. The weather is harsh. Crime is high. Most of the people with competence and ambition moved out when the jobs did.
Don't worry about the rare earth supply problem. Mountain Pass, California is already coming back on line.
"Painful place to build things". Silicon Valley is a very expensive, over-regulated place to do business. The only advantage it holds for current business is the critical mass of engineers that make it easy to cannibalize talent from other companies. Electric vehicle companies would likely adopt a model similar to Apple, wherein design work is done in-house in the Silicon Valley, but manufacturing is done in Taiwan or China. Also, the high efficiency vehicles of the future won't be 4-wheel cars; the safety standards for motorcycles are far less restrictive than those for automobiles, and any 3-wheel vehicle can be classified as a motorcycle. There are also several full electric motorcycles coming out now (e.g. Zero Motors).
The "It takes $1 billion and 5 years to launch a new vehicle" is simply bullshit. It make take that long if you do it the way Detroit does it, but history has shown that Detroit is doing it wrong! Modern businesses are no longer the huge vertically integrated monopolies of the early industrial age; it is now possible to buy everything from out of house. "Wrong kind of engineers" is also bullshit -- create a demand for automotive engineers and Stanford and Berkly will train them! Granted, there is a 4-year lag, but the reason there is a Silicon Valley in the first place is because the world-class universities in the area created a pool of world-class engineers. Again, having engineers that are trained to do things "the GM way" is a disadvantage, not an advantage.
I've abandoned my search for truth; now I'm just looking for some useful delusions.
Are they kidding? Silicon Valley already doesn't do a lot of it's hardcore manufacturing. Neither does Detroit anymore.
Detroit doesn't do manufacturing? That would be news to those of us who live in Detroit. Despite all its problems, Detroit still is the beating heart of manufacturing in the US. EVERY automobile company has a presence in Detroit. Every major auto supplier has a presence in Detroit, many headquartered here. There is still heaping gobs of manufacturing jobs throughout Michigan even despite the recent problems. Major defense contractors like General Dynamics as well as lots of biomedical engineering goes on in Detroit. It's also one of the top 5 finance hubs in the US.
Silicon Valley won't be the Detroit of green cars because Detroit will be almost certainly be the Detroit of green cars. Little known fact: Detroit metro has the FOURTH highest amount of high tech employment in the US. Detroit already has huge expertise in building cars, existing infrastructure, tons of engineering talent, idle manufacturing capacity and a work force in need of employment. Michigan is investing huge into battery manufacturing. Silicon Valley will get involved to be sure - especially in the electronics that are going to be an ever more important part of the vehicles. Not to say things are roses in Michigan; they aren't but anyone who thinks Michigan is out of the manufacturing business doesn't understand manufacturing.
There's no good reason that the Valley can't be the R&D center for even conventional cars.
Sure there is. The engineering talent and the companies that need it already live elsewhere. Moving to Silicon Valley would require uprooting a lot of existing investments, people to relocate to a place with no particular advantages in technologies specific to automobiles besides electronics and software. There is auto R&D that occurs in California already but Silicon Valley isn't remotely the only place with engineering talent in the US. Could it happen? Sure. Likely? Very very doubtful.
An electric car would be no different from an iPod in this respect.
Right, because building iPods makes Apple/HP/etc perfectly suited to get into the auto manufacturing business. No difference whatsoever... [/sarcasm]
I don't think Modesto, Stockton, Fresno, Bakersfield, or pretty much the entire Central Valley is considered a 'desirable place to live'. And I'm not clear on how running air conditioning 24/7 throughout most of the state reduces energy consumption, nor can even the highest consumer energy consumption compare to myriad widget factories producing millions of widgets each with only 1000 employees or less. How many humans even work in a modern auto plant?
I once took an excursion to Reddit, and later HN. Unlimited up/down voting sucks when dealing with a hive-mind.
Operating in Detroit has its own problems. The weather is harsh. Crime is high. Most of the people with competence and ambition moved out when the jobs did.
Bullshit. The weather is fine unless you are a huge sissy and in case you didn't know, manufacturing occurs indoors. The workforce and engineering talent ALREADY lives here. Crime is not particularly high in most of Michigan. Since you are obviously ignorant about how things work in Detroit, most of the manufacturing does not take place in high crime areas. Very few companies actually make anything in Detroit proper - everyone moved out to the suburbs LONG ago. Oakland County (the one immediately to the north of Detroit proper) is one of the wealthiest counties in the entire country and one of only 10 or so with a AAA credit rating.
The dumbest comment though is the last one you made. No one with any competence in Detroit? Spoken like an ignorant jackass who doesn't actually know anything about Detroit or what goes on there. Michigan has the 4th highest amount of high tech employment of any major metro area in the US. The place is absolutely crawling with engineering talent. Might not be as glamorous as microchips and software but make no mistake that there are a LOT of very smart people in Michigan.
Nice polemic, and echoed widely. On the other hand, California leads the entire US by "value added by manufacturing" and on its own dwarfs the entirety of the Southern states the authors hold up as an example. For example, according to the US Census Bureau, California created $254bln in added manufacturing value with 1.3 million workers in 2008, South Carolina: $37bln with 230000 workers. If you crunch the numbers, you'll also see that California produces more value per worker than most other states. And until the meltdown last year, one of the primary car factories in the US was Nuumi in Fremont, CA, actually the Toyota plant Tesla bought.
Yes, once prices come down and everyone can do it, it'll probably electric car manufacturing will probably move to other states and California will get started on the next thing. But to get this off the ground initially, Silicon Valley is a great spot, because all the expertise you need to debug the process is within a two hour drive.
And by the way, Porsche, Mercedes, Audi, and BMW main factories are in Germany's most expensive areas, very few are in the more depressed parts (although Wolfsburg is really depressing).
The conservatives who decided it should be all but impossible to raise taxes ever, that was also pretty short sighted.
So you're saying the highest taxes in the nation just aren't high enough? What are you smoking? I lived in Texas, and it had roads and schools and hospitals and no income tax. I lived in Florida, and it had roads and schools ans hospitals and no income tax. Now I'm in California, and its roads, schools, and hospitals are just the same, but it somehow a 9% income tax isn't enough, and the state is bankrupt? What a buch of losers, whatever their political stripe.
Socialism: a lie told by totalitarians and believed by fools.