Fadell: Detroit's auto industry challenge comes from within

September 25, 2016 8:00 a.m. Updated

The latest venture for Tony Fadell, creator of the iPod, is California-based Actev Motors, a builder of connected go-karts, earlier this year — and it might be on its way to the Motor City.

The $999 go-karts are connected to the internet and cater to children ages 5-9. The carts went into production in China last week. Fadell said the plan is to bring final assembly to the U.S., hopefully in Detroit.

“They are expensive to ship (from China),” Fadell said. “It should be able to be done here; it’s just a matter of time.”

Fadell, in a chat with Autoweek Publisher Dutch Mandel at the Detroit Homecoming, said Actev is part of the technological tapestry representing where cars are going and what Detroit needs to succeed in the future of mobility.

That happens by refocusing on the future of automotive — like car sharing, electrification and autonomous cars.

“Today, you don’t buy just one pair of shoes, but that’s what you do with a car,” Fadell said. “Now, we can get a pickup from Uber. And today I may need a compact car, but a van tomorrow. Consumers are going to be choosing that pair of shoes that fits the need. That’s the dramatic change coming by 2035.”

Detroit’s automotive industry is in reformation. Grappling with the realities of rapid technological advancements and rubbing against the “app culture” in Silicon Valley, the industry is working with Silicon Valley’s tech leaders and buying up startups in the new field of mobility.

The challenge for the auto industry is to replicate the environment of Detroit a century ago, when it was a hotbed of innovation.

Tony Fadell, creator of the iPod and former CEO of internet of things company Nest Labs, said Detroit is faced with the paradox of manufacturing with metal in a digital world.

“You’re in the nascent stages of (connected and autonomous) cars,” Fadell, an alumnus of Grosse Pointe South High School, said in an interview at the Detroit Homecoming event earlier this month. “You’re not building an ecosystem … yet. Will your major industry build startups like it used to?”

That happened during the dawn of the automobile.

Detroit became the Motor City for a number of reasons. Timber was ample throughout Michigan, iron ore was plentiful near the rail lines from the Mesabi Range in Minnesota to Marquette and, most of all, Henry Ford and Ransom Olds built a larger manufacturing landscape with a feeder chain of parts makers.

Oldsmobile led the push to subcontract parts production in the early 20th century, thus creating the industry’s supply base. Nowadays, they’d call it an “ecosystem.”

The industry must now find a way to build new companies for a new world, Fadell said.

So far, it’s working the other way around.

General Motors Co. acquired Cruise Automation, a maker of autonomous vehicle tech, for more than $1 billion in March. It invested $500 million into car-sharing service Lyftand later launched its own service called Maven.

Ford Motor Co. founded a subsidiary, Ford Smart Mobility LLC, which acquired San Francisco ride-sharing firm Chariot. It also partnered with Uber to test autonomous Ford Fusion taxis.

Last year, Southfield-based Lear Corp. acquired automotive connectivity firm Arada Systems Inc. and intellectual property and technology from Autonet Mobile Inc. to push into the connected-vehicle market.

The true mark of success is when the opposite happens, when Ford or GM or Lear spin off a tech company that supports the industry’s quest toward mobility and the car is no longer a car and the industry is no longer only automotive and Detroit is no longer only the Motor City, Fadell said.

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