Detroit vs. Silicon Valley as green auto hub

October 29, 2010

Composite image shows an aerial view of downtown Detroit (left) October 16, 2006 REUTERS/Molly Riley, and a view of a rainbow over San Jose City, California, Feb. 5, 2009 REUTERS/Juan Carlos Ulate

There’s a debate touring its way around the blogosphere these days: should the new green auto industry be based in Motor City Detroit or shiny, happy Silicon Valley?

The Valley in southern San Fransisco Bay area is already a hub for electronics expertise – certainly a cornerstone in the pursuit for innovative design and engineering. The world’s largest high-tech companies, including Apple, Google, Facebook, and Intel are headquartered there.

The culture of the region, a recent NPR series pointed out, is “where people are used to taking a chip, a cell or an idea and working on it until it becomes something big.”

But is that enough to build a manufacturing industry? says no way, and for three reasons. Car companies need money and lots of time to mature to a point where they make any money, not exactly the model for the quick-turn success Silicon Valley hosts by the bucketfull. Secondly, programmers, coders and microelectronics experts may rule the tech industry, but electric cars require a whole different specialized skill set – automotive mechatronics (combining mechanical and electronic engineering) and high-voltage systems skills. Lastly, the cost of living is high in California and it’s too highly-regulated a place for companies to locate, especially if they manufacture physical goods.

Tesla may be there, but one yet-to-turn-a-profit automaker does not an industry make. (Incidentally they chose California because of a sales tax exemption on the purchase of manufacturing equipment and grants for training staff. )

So does that leave Detroit as the best option for new electric carmakers to set up shop? Posts in IT chatroom seem to lean in favor of the titan of the American automotive industry. In recent years it has been among the hardest hit in the economic meltdown and could certainly use the jobs and stimulation a few active plants would bring.

“Despite all its problems, Detroit still is the beating heart of manufacturing in the U.S.  EVERY automobile company has a presence in Detroit,” writes sjbe, one of 329 commentators on “Silicon Valley won’t be the Detroit of green cars because Detroit will be almost certainly be the Detroit of green cars.”

What do you think?

Composite image above shows an aerial view of downtown Detroit, Oct. 16, 2006 REUTERS/Molly Riley, and a rainbow over San Jose City, California, Feb 6, 2009 REUTERS/Juan Carlos Ulate

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