Recently, firms like Tesla have launched themselves into the public eye by trumpeting the meme that Silicone Valley’s innovation-driven culture will show the way for Detroit which remains mired in old-economy faults. And it’s a storyline that has yielded millions in venture capital and free media attention. The New York Times’ Thomas Friedman unintentionally brought this line of thinking to its point of absurdum by calling on Steve Jobs to “do national service and run a car company for a year.” But as our ongoing Tesla Death Watch consistently demonstrates, Silicon Valley automakers could still stand to learn a thing or two about, you know, actually producing cars from even Detroit’s most dismal. And then there’s this story from The San Jose Mercury detailling the extent to which Silicon Valley is dependent on business from Detroit. “As soon as the automotive industry coughs, a lot of other companies get a cold,” Gartner analyst Thilo Koslowski tells the Merc. “That includes companies in the semiconductor industry and that includes a lot in the Bay Area… It’s a relatively big market for them in Silicon Valley.”
Needless to say, Detroit’s metaphorical cough is getting all kinds of loose and bloody, but high-tech firms aren’t dropping the way traditional auto suppliers have been. In fact sales of auto-related semiconductors are supposed to increase steadily by about $1b per year, hitting $22b in 2009. So what gives? Cars are getting smarter, stupid. Meanwhile, if Silicon Valley can show that it has the attention span for production and customer service-oriented business, it could help America’s auto industry surf the tech-happy industry trends. Declaring game-changer status with a lot of hat and no cattle (as Tesla has) isn’t going to cut it though.
Thomas Friedman resides in DC and writes for NYTimes. The man has been isolated from life for most of his adult life. And when he was involved with mere mortals it was in normalcy of Lebanese wars. Whatever he is preaching has been resonating well with public as grounded in reality as he is.
As far as Silicon Valley teaching Detroit, they probably can give Detroit a lesson in raising capital, political mingling (remember Clinton & Gore?), marketing, market research & innovation.
It is not only Detroit’s cough that makes Silicon World twitch in pain. It is global recession and coincidentally automobile industry went into tail spin after financial: the biggest client and contributor to the Valley.
why is friedman considered a guru by anyone anywhere? he’s the biggest ugliest know-nothing space waster on the nytimes opinion page, a page where the competition to the bottom is fierce. his inane comments about jobs & the auto industry are the least of his crimes against humanity (not to mention intelligence). do us a favour jocko & at least add a “no follow” directive to the link to friedman’s mindless drivel …
Just a little note to the folks from Texas. Did ya’ll know that GM buys about 2 million ASyncronous Ram Processors from Freescale of Texas each year. They stop buying those and its gonna leave a mark that won’t buff out. (Jus sayin) They buy alot from Cypress to.
I also find the Amtel guys opinion halarious. He sez “according to Matthias Kaestner, an Atmel marketing executive who declined to be more specific. Nonetheless, he noted that the company is somewhat shielded from the Big Three’s woes because it sells many of its chips to European carmakers, which do not appear to be in as dire shape.” If he’s talking about any of GM’s sub divisions I got news for the guy. GM’s products world wide use the same electronic modules based on common designs. (ie Opel,Holden etc don’t do their own electronic modules anymore) Their commonly used in most cases not to leverage the economies of scale and minimize the volume of duplicate engineering. If he’s talking Bosch,Siemens,Denso or Hitachi they are all Tier 1 suppliers to GM and I garuntee you Ford and Chrysler.
Pshar
I’ll do you one even better. HP used to be GM’s tier 1 supplier for Computers and printers. Late last summer GM drop kicked HP and their billion dollar contract to the curb in favor of Dell. When it became public knowlege that GM was on the ropes in October one of the first CEO’s to squack “let em die” was that flaky broad running HP.
Sour grapes?
The Silicon Valley flyover is priceless. There’s some neat anachronisms (Delphi, Farallon, Network General and Bay Networks were the ones I could identify). It’s sad to think how many of these have failed and/or been hoovered up. Even sadder are companies like HP that nearly lost their soul under Wagoner-style management.
Interestingly, the fellow who started Compaq’s decline and, indirectly, the commoditization of HP, now sits on GM’s Board.
I didn’t know Air Liquide was there, though. Interesting, given their work in the boondoggle that is hydrogen.
sorry for the duplicate
WOW!
Maybe there’s a future for them making light bulbs that work for VW
Read the San Jose Mercury Times article….it’s like I keep telling y’all…If we let the Big-3 go under or even slip into bankruptcy, we are all going to have a mess on our hands that we will only wish could be averted with a ‘mere’ $50 Billion….the ripple effect will be a tidal wave like we haven’t seen since the Depression….
Bubba,
We also have domestic truck plants in Texas; however, being mostly people of principle, we are mostly against the bail out no matter what it might do to our pocketbooks. The type of argument you offer sells a lot better east of the Mississippi and north of the Mason-Dixon line.
Okay, maybe those Dallas banker types might be influenced by your pitch. They often have incorrect leanings. You didn’t hear anyone around hear asking the feds to bail out Enron did you?
It is always 2010 in Silicon Valley