Starkman: Sorry Michigan, California Is Stealing Your Automotive Crown

March 06, 2024, 12:45 AM

The writer is a Los Angeles freelancer and former Detroit News business reporter. This column first appeared in his blog, is being published with permission.

By Eric Starkman

Gov. Whitmer

Pathetic! That was my immediate reaction upon reading that Michigan Gov. Gretchen Whitmer is traipsing around Taiwan and South Korea hoping to drum up some jobs for her beleaguered Michigan, where the Detroit Three automakers are not-so-quietly bailing on the state. Underscoring Whitmer’s myopia and lack of business smarts from having only worked in politics and never held a real job, she’s decided to open a state office in Taiwan to give Michigan a permanent footprint in the East Asian Island.

Nineteen other states have already opened offices in Taiwan, so Whitmer is a little late to the Taiwanese party.

“We are sharing our story around the world and competing with other nations to bring jobs, projects, and supply chains back home to Michigan,” Whitmer said in a statement.

Michigan Capital Confidential

Whitmer’s job creations are as imaginary as Spotty, my childhood stuffed animal that served as my pretend dog because my mother wouldn’t let me have a real one. Whitmer is always crowing about creating “good paying jobs,” but as of September of last year, Michigan had the same number of jobs as when she was elected four years earlier. Meanwhile, the number of U.S. jobs rose 4.2% in the same period.

Whitmer’s definition of a good paying job is different than mine and no doubt her two trust fund daughters attending the University of Michigan.

Whitmer crowed that Ford would create 2,500 jobs when she spearheaded $1.8 billion in taxpayer subsidies so the automaker in partnership with a China-based company could destroy fertile farmland in a picturesque rural area to build a battery plant. Ford has since scaled back the project and is only committing to create 1,700 jobs, some of which will likely be going to employees of Ford’s China partner.

Ford’s Michigan battery plant will only be paying about $41,500 to its factory workers, while the median wage in the region is $45,000. I wouldn’t work at a lithium battery plant if you paid me the $29 million a year GM pays CEO Mary Barra. It’s a job fraught with health and safety risks; one worker was killed at GM’s battery plant in Ohio when it wasn’t even fully up and running. WDIV-TV did an impressive job explaining why you don’t want an EV manufacturing or lithium battery plant anywhere near your neighborhood.

Mary Barra

In any case, Ford’s Michigan battery plant will be a mere pimple when compared to what the automaker is building in Tennessee and Kentucky. Ford announced with great fanfare two years ago that it would invest $11.4 billion to build a mega EV manufacturing campus in Tennessee and twin battery plants in Kentucky, creating a total of 11,000 jobs. Although one of the Kentucky battery plants have been put on hold, the project signified that Ford no longer was all that into Michigan.

Ford’s tenuous commitment to Michigan is becoming alarmingly clear, and for that matter, so has GM’s. The best jobs to be had at these companies are in California, where the executives shaping their futures are located.

Ford CEO Jim Farley recently disclosed that he has a team in California working on developing a low-cost electric vehicle platform. TechCrunch followed up with a report saying the project was launched by former Tesla executive Alan Clarke, whose team is in the Southern California city of Irvine and includes engineers from Auto Motive Power (AMP), the EV power startup that Ford acquired in November 2023. AMP founder Anil Paryani, who overlapped with Clarke for about five years at Tesla, is also part of Ford’s EV skunkworks project.

AMP had 150 employees when Ford acquired the company. Alan Clarke’s LinkedIn page says he’s located in Irvine, and Paryani’s page says he’s located in Cerritos, which is about 25 miles north of Irvine. Doug Field, who oversees Ford’s EVs and Digital Systems, is based in the Silicon Valley city of Los Gatos. Roz Ho, Ford’s chief connected vehicle officer, is in the San Francisco Bay area, according to her LinkedIn page.

Mike Amend, Ford’s Chief Enterprise Technology Officer who reports to Farley, is based in the Metro Charlotte area in North Carolina, according to his LinkedIn page.

Ford also has an office in Palo Alto office, which according to its website has nearly 300 researchers, engineers, designers and scientists and growing. The office has two new buildings and 182,000 square ft. of work and lab space and is focused “on bringing the best of Silicon Valley to accelerate the realization of Smart Vehicles for a Smart World.” I’ve long perceived Ford as a loser legacy automotive company, but the accompanying video shows the company is  doing some cool stuff in California.

Ford CEO Jim Farley

It seems obvious Ford’s best  jobs are in California, where Farley previously lived when he worked at Toyota, which relocated to Texas from California years ago. A source told me Farley still owns a home in the L.A. area, which might explain why when he tested the EV charging experience of his electric F-150 Lightning pickup, he did it in California. It’s questionable how much time Farley spends in Michigan given that his spouse lives in the U.K. where she performs in a rock band. That possibly explains why Farley’s $21 million in 2022 compensation included more than $900,000 in private plane travel.

GM’s Barra recently boasted that she’s put in place her software dream team, which is headed by Mike Abbott, who the automaker lured from Apple last May and reports to Barra. Abbott’s LinkedIn page says he’s based in Menlo Park, which is in Silicon Valley.

“Mike Abbott has brought in an incredible team: hired people from Google, from Apple, from Meta and many tech companies,” Barra said. “We’ve already revamped the software development process and more importantly the validation process.”

It seems a safe bet that Abbott’s “incredible” team is in the Bay area.

When Arden Hoffman, who Barra promoted to chief people officer in late 2022 from the company’s troubled driverless taxi Cruise subsidiary, her LinkedIn bio listed San Francisco as her location, which is where Cruise is based. Hoffman, who reports to Barra, now lists United States as her location, but when she started at GM, she told employees that she was looking forward to spending time in San Francisco, Detroit, and Montana, where she presumably owns a home.

Lin-Hua Wu, who was hired from Google to oversee GM’s communications and reports to Barra, is based in San Francisco, according to her LinkedIn page. I’ll be charitable here and assume that since Wu only joined GM eight months ago, perhaps she hasn’t gotten around to updating her location. It would speak volumes if the person responsible for overseeing GM’s communications is based in San Francisco.

GM also has an advanced design and technology campus in Pasadena near Los Angeles, which also is where ArtCenter College of Design is located, from where many of the leading automotive designers graduated from. Pasadena is also the North American headquarters for BYD, China’s powerhouse EV manufacturer.

Rivian, which was once headquartered in suburban Detroit but bailed on Michigan because CEO RJ Scaringe reportedly viewed the state as having “an old technology image,” is headquartered in Irvine. Nearby Newport Beach is where Toyota’s Calty Design Research studio is located.

Google’s driverless taxi Waymo business, which has a deepening partnership with Stellantis, is headquartered in Silicon Valley. Most notable of all is that Elon Musk last year christened Palo Alto Tesla’s global engineering headquarters, declaring at an event the company would “build our future here.”  

What’s remarkable is that California attracted the best EV jobs without taxpayers having to fork out a penny. The only automotive jobs Whitmer can attract to Michigan are significantly lower paying factory jobs that taxpayers must heavily subsidize. Whitmer was prepared to pay $700,000 for every $41,500 job that Ford created for its battery plant. It’s frightening that despite appallingly poor economic leadership, Whitmer is routinely mentioned as a worthy presidential candidate.

No doubt Ford and GM will continue to maintain Michigan is their forever home. Sadly, I can imagine in a few years that GM’s Detroit headquarters and Ford’s Dearborn headquarters will be empty buildings with Coney Island menus strewn out front and some battery powered blinking black boxes inside.and giant FOR LEASE signs.

Reach the writer at Confidentiality and anonymity are assured.

Read more:  Starkman Approved

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