WATCHING THE WEST
Photo credit: AUTOMOTIVE NEWS ILLUSTRATION
Nick Gibbs
Automotive News
November 22, 2015 – 12:01 am ET
In 1888, Bertha Benz made the first road trip, from Mannheim, Germany, driving a pioneering car built by her husband, Karl.
In 2013, Mercedes-Benz retraced Bertha Benz’s route using an autonomous S-class concept that piloted the 60 miles without driver assistance. But that feat received only a fraction of the publicity Tesla garnered this year when it offered what it billed as the first production car that could drive itself — the Model S fitted with Autopilot.
Except it wasn’t really the first. German makers, particularly Mercedes, have offered similar semiautonomous technology in production vehicles for a while. But they have reaped considerably less media praise than Tesla, which dared to expand the hands-free element.
And that’s what worries Germany.
German automakers and suppliers fear that America’s audacious tech companies are grabbing the initiative within the auto industry as cars become more about software and successful data manipulation and less about traditional hardware.
Their response is to try to ingrain that risk-taking Californian ethos into their own companies.
“In Europe, everything is forbidden until it is allowed. In America, everything is allowed until someone says, ‘It’s a little bit dangerous, so let’s regulate,'” Audi CEO Rupert Stadler told journalists at the Frankfurt auto show this fall. “This is a cultural element we have to confront.”
Granted, Stadler’s comment takes on a different dimension following parent Volkswagen AG’s acknowledgement that it cheated on U.S. emissions tests, but the sentiment remains: We must be less staid.
In the new r&d center just opened by German supersupplier Bosch at Renningen near Stuttgart, that desire to push staff beyond the traditional German rigidity is symbolized by a clock hanging in a Silicon Valley-inspired “creativity room.”
It doesn’t tell the right time, a provocative move in any engineering environment, let alone a German one. “People are clearly irritated by the clock, but it changes their perspective,” Bosch’s head of r&d, Michael Bolle, told journalists at the opening.
“In Europe, everything is forbidden until it is allowed. In America, everything is allowed until someone says, ‘It’s a little bit dangerous, so let’s regulate.’”
Audi CEO Rupert Stadler
Bosch’s new r&d center in Renningen, Germany, aims to push staff beyond traditional German rigidity.
Startup culture
At Renningen, Bosch is cultivating what it calls a startup culture. Any of the 1,700 researchers there who come up with a good idea will be allowed to develop it as a stand-alone project, replicating the California venture-capitalist model.
“What we’re lacking in Germany is the willingness to start up companies, a lack of audacity,” Bosch Chairman Volkmar Denner said, quoting research that just 25 percent of Germans could imagine forming a new company vs. 40 percent of Americans. “If Silicon Valley is a role model, then we must learn to be daring.”
Denner talks of California’s Stanford University as the inspiration for the layout of the Renningen campus, which features the communal workrooms, funky outdoor meeting spaces and interconnecting buildings recognizable from Silicon Valley tech headquarters. It’s designed to both inspire staff within and attract the brightest from elsewhere.
“We are in a war of talents,” says Bolle.
Bosch research carried out at Renningen includes autonomous cars, the next EV battery (helped by the purchase of Californian new-generation battery developer Seeo) and the manipulation of big data, another arena in which German makers fear U.S. tech firms are running rings around them.
The response from BMW, Mercedes parent Daimler and Audi was to announce in August they would club together to buy Nokia’s mapping service Here for a whopping 2.8 billion euros ($3 billion). It gives the makers access to the much richer mapping needed for autonomous driving and also to the data required to supply location services that are forecast to grow ever more important as cars become more connected.
Stadler at Audi was clear about the reason for the purchase: “Our decision is not to be dependent only on U.S. companies, on Silicon Valley companies.”
The CEO of Here, Sean Fernback, went further.
“Google is doing its own thing, Apple is doing is own thing. Uber are Uber. None of those want to be open — they don’t want to share or license their data,” Fernback told Automotive News at the Frankfurt show.
He admitted it was a long-term play, but as Google has shown, a company is in a much better place if it controls the data. “If [the makers] were to use somebody who provides all that, they don’t get that large piece of the pie,” he said.
Bosch’s “creativity room” in Renningen, Germany, is designed to spur unconventional thinking. It includes a clock that tells the wrong time.
‘Different mindsets’
Of the big three German premium automakers, Daim-ler is doing the most to strike back against the perceived future dominance of the California companies. All three German companies have r&d satellites on the West Coast, but the center Daimler opened in Sunnyvale in 2013 is arguably the closest in spirit to the big tech company headquarters there — it even engaged the same architect used by Amazon and Google.
In the summer, Daimler CEO Dieter Zetsche led 100 of his executives in a series of meetings with top Silicon Valley companies, analyst firm IHS Automotive reported in September.
“We have returned with somewhat different mindsets with what we left with. Speed, competence, acceptance of failure; these are all things which are extremely strong there. It strengthened our conviction for the need to change,” IHS quoted Zetsche as saying.
Tesla’s media success with Autopilot probably rankled within the German company, said senior analyst Tim Urquhart. Mercedes, for instance, introduced its Intelligent Drive package of safety and driving-assistance systems on the 2014 S class. The features include traffic-jam assist, with which the car can steer, brake and accelerate autonomously at speeds lower than 37 mph.
“Arguably, Daimler is the world leader in autonomous driving tech, and yet Tesla has stolen a PR march on them with Autopilot,” he told Automotive News. “The traditional German premium OEMs are missing a trick in not publicizing the technology that they already have in their cars.”
“The traditional German premium OEMs are missing a trick in not publicizing the technology that they already have in their cars.”
Tim Urquhart,IHS
Others are wary
Of course, the German premium carmakers are not the only automakers worried about Silicon Valley, particularly when Google and reportedly Apple are looking to build cars.
“The change that is coming, the next phase in our industry’s development, may well be as big as the revolution we created when we opened the possibility of car ownership to the masses with the Model T,” Ford of Europe CEO Jim Farley told an industry audience this month in Barcelona, Spain.
General Motors is one company not convinced by the headlong rush by automakers to establish a beachhead in the San Francisco Bay Area and network with startups.
“What’s the right number [of employees]? Is it 50? Is it 100? Is it 300?” CEO Mary Barra said in an interview in October. “You’ve got to build relationships and understand the mindset. I can put up a building … but it’s not like it’s in the water.”
For the German automakers and their homegrown suppliers, however, California is now looking worryingly like Stuttgart did at the end of the 19th century — the birthplace of the future of motoring.
They want to be in California, employ the brightest players there and export the whole mindset back home. And then generally loosen up a bit.
As Bosch’s Denner said: “We must learn that failure is not shameful.” c
You can reach Nick Gibbs at ngibbs@crain.com.
advertising
This entry passed through the Full-Text RSS service – if this is your content and you’re reading it on someone else’s site, please read the FAQ at fivefilters.org/content-only/faq.php#publishers.
www.autonews.com