Ford Is Upping Its Stake in Detroit's Downtown Revitalization - Pacific Standard

Ford Is Upping Its Stake in Detroit's Downtown Revitalization

The company just announced its acquisition of the Michigan Central Station in downtown Detroit, an icon of the city's 20th-century glory days and its precipitous fall since.
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A man rides his bike past the shuttered Michigan Central Railroad Station November 20th, 2008, in Detroit, Michigan.

A man rides his bike past the shuttered Michigan Central Railroad Station November 20th, 2008, in Detroit, Michigan.

In recent years, several of the largest automakers in the United States have rebranded as "mobility" companies. To varying extents, General Motors, Toyota, Ford, Daimler, and BMW have promised shareholders their participation in creating the autonomous, cloud-connected, and potentially communal future of transportation.

Ford has been among the most vocal about its commitment to that future. Now, the company is placing a physical stake in it. Recently, Ford announced its acquisition of the Michigan Central Station in downtown Detroit, an icon of the city's 20th-century glory days and its precipitous fall since. The soaring, 1913 Beaux-Arts depot and its accompanying 18-story office building have fallen into disrepair since the last train pulled out in 1988. More recently, it's become a haven for ruin-porn enthusiasts. But in four years, the edifice will serve as the central hub of Ford's 1.2-million-square-foot planned corporate campus in the downtown neighborhood of Corktown, according to Ford. That footprint will also include the former Detroit Public Schools Book Depository, two acres of vacant land, an old brass factory site, and a former pantyhose factory that Ford has already refurbished and placed about 200 employees in.

In a phone call with CityLab, Ford Chief Executive Officer Jim Hackett expressed a vision for the Corktown campus to serve as a hotbed for start-ups, investors, and other "partners" in the self-driving vehicle space. "We get to demonstrate how the systems of the future work, and we get to live in it," he said. "We'll be eating our own dog food, in a sense, so that we understand how technology is evolving. We could do this anywhere in the world, and it will happen anywhere, but the fact we get to live in it in Detroit is an important advantage." Hackett is something of an automotive outsider. Before he was named chief executive of Ford in 2017, he was chairman of Ford Smart Mobility, a segment focused on emerging mobility services and autonomous vehicles, for about a year. Prior to that, Hackett served 20 years as chief executive officer at Steelcase, the world's largest office furniture company.

No exact plans exist yet for either the station or the campus (though more may be coming Tuesday), but William C. Ford, the company's chairman and a great-grandson of Henry Ford, told the New York Times he'd like to see the ground floors converted into a public space filled with shopping, dining, and urban bustle. "We really want this to be a hub of life for this part of town," he told the Times. On the timeline of progress for downtown Detroit's revitalization, one columnist for the Detroit Free Press called Ford's announcement "the city's biggest comeback moment yet" and "a turnaround of miraculous dimensions."

Though Ford's electric and autonomous vehicle subsidiary will be based at the Corktown campus, Hackett said that he hopes that employees will move between there and the company's Dearborn headquarters, which is also slated for an overhaul, as well as its Ann Arbor location, close to the University of Michigan's self-driving vehicle test grounds. Business teams should not be siloed from one another, Hackett said; he gave the example that a truck engineer working on F-150s in Dearborn might need input from a "smart" software engineer working in downtown Detroit. The funds to expand in Corktown will come from the estimated $1.2 billion already planned for the Dearborn changes.

The move into Detroit aligns Ford with other companies looking downtown for their new and future footprints in order to attract a younger workforce that values a central location. Google, Microsoft, and Facebook have all carved out prominent space in San Francisco and Manhattan, even as they've kept their flagships in Silicon Valley. Older companies have also joined the urban migration in the hopes of shedding their images of suburban, nine-to-five stalwarts. General Electric is in the process of relocating to Boston from Fairfield, Connecticut, while Aetna flirted with pulling up stakes in Hartford for a move to New York City. McDonald's has shifted its headquarters from an Illinois suburb to downtown Chicago.

For a "mobility" company, though, a downtown presence isn't only a human-resources perk; it's also a product test ground. Last year, Ford invested $1 billion in Argo AI, an autonomous vehicle LiDAR developer. In January, it purchased Autonomic, a cloud-based digital platform for managing transportation systems, and TransLoc, a start-up that builds software for streamlining urban transit. Launched in 2016, Ford's Smart Mobility segment has also worked closely with city governments around the world to develop products designed to solve local transportation snags directly. Over the past two years, Ford made forays in ride-hailing and bike-sharing services in San Francisco and autonomous vehicle testing in neighborhoods in Miami and Ann Arbor. Earlier this month, it launched a "City of Tomorrow" competition in Pittsburgh, where it will draw ideas from locals about how their daily travel experiences could be improved.

"It's time to bring streets into the sharing economy," Hackett declared in his keynote address at the Las Vegas tech convention CES earlier this year, where he talked about the company's various efforts to spread "smart" parking technology and cloud-based transportation systems.

Streets are already shared, of course, since they are public property. And not all communities have welcomed the penetration of connected sensors and "smart," demand-based mobility offerings from companies like Alphabet, Uber, Microsoft, and other tech heavyweights. Advocates and public officials have reason for concern that the future of automobiles may be a lot like its past with respect to how they'll shape cities. Just as 20th-century automakers lobbied for the creation of the highway system, which plowed through neighborhoods and divided cities, the industry's efforts to wring profit from urban streets today may further inflate the influence of private sector on public space.

Will Corktown residents happily invite product testing in their community? Hackett told CityLab that the company plans to work with residents and business owners in the neighborhood to learn about how the company's present and future offerings could help them. Detroit Mayor Mike Duggan has been supportive, he added. "We want to make this a community-based experience," Hackett said. "The city is really excited because they get to pioneer in ways that relate to transportation too."

But it also remains to be seen whether Ford's buzzy cocktail of future-mobility tech adds up to a winning business strategy. During the first quarter of 2018, the company's "Smart Mobility" arm, which includes its autonomous vehicle projects and city solutions initiatives, reported $102 million in losses during the first quarter of 2018, Forbes reported in April. That segment lost about $300 million for the full business year of 2017, the company said in January. Profits are slumping at the country's Number 2 automaker, which has struggled with the rising cost of critical manufacturing materials and internal inefficiencies. In April, Ford announced that it planned to discontinue most passenger cars from its U.S. catalog by 2020 and will focus on new trucks, SUVs, and electric vehicles in order to drive up margins.

That renewed emphasis on F-150s and the like has also raised questions about Ford's stated commitment to shrinking carbon emissions from the transportation sector, which the company often relates to its "city solutions" projects. So has the company's appeal to President Donald Trump, alongside other major automakers, to revise federal auto emissions standards. But Hackett insists that it is all of one strategic piece. "The industry has made tremendous progress," he said. "Electric vehicle technology is coming in faster than we thought and the promise of connectivity is that we can get rid of more traffic and waste." Now, Detroit will have a major stake in the bet that that holds true.

This story originally appeared on CityLab, an editorial partner site. Subscribe to CityLab's newsletters and follow CityLab on Facebook and Twitter.

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