Google's self-driving car spinoff Waymo said Tuesday it will bring a factory to Michigan, creating up to 400 jobs at what it describes as the world's first plant "100 per cent" dedicated to the mass production of autonomous vehicles.

The company plans to spend about $13.6 million to retrofit a to-be-determined manufacturing facility in the Detroit area. In exchange, it will get a state incentive grant worth up to $8 million that was approved Tuesday by the Michigan Strategic Fund Board.

Waymo spokeswoman Alexis Georgeson said the company plans to hire up to 400 people to work at the factory, including engineers, operations experts and fleet co-ordinators. She said Waymo is looking for a site and hopes to open the plant in the middle of this year. A memo from the Michigan Economic Development Corp. says Waymo will create 100 jobs, with the potential for up to 400, and it chose Michigan despite a "high level of interest" from states in the Midwest, South and Southwest.

The company integrates its self-driving system into vehicles it buys from automakers and is currently testing autonomous Chrysler Pacifica minivans in a preferred rider program for passengers in the Phoenix area, but with human backup drivers on board. It plans to expand the service to the San Francisco area but has not given a time frame. Waymo previously announced plans to buy 62,000 Pacificas and 20,000 I-Pace electric SUVs from Jaguar.

Waymo, which has a 20-employee facility in the Detroit suburb of Novi where it tests vehicles in snowy weather, will put the new factory in Wayne, Oakland or Macomb counties, where the auto industry dominates the economy with thousands of jobs from U.S. and foreign-based automakers as well as parts supply companies.

Zeus, a self-driving car designed by a group of University of Toronto students, outperformed autonomous vehicles built by other teams during the AutoDrive Challenge earlier this month. (Submitted by the University of Toronto)

"As we begin to commercialize our business and vehicle supply grows, we're laying the foundation for a scalable, robust vehicle integration plan, starting in Michigan," the company said in a blog.

Bryant Walker Smith, a University of South Carolina law professor who studies autonomous vehicles, said the announcement shows that Waymo, which was spun off from Google and is part of parent company Alphabet Inc., has plans to integrate itself into the existing auto

industry.

MIT has been using a game to help program computers in the kind of emergency decision making humans would like autonomous vehicles to make. (MIT)

"You can't reinvent everything. Coming to Michigan in some ways is your complete recognition of that," Smith said. "Michigan is where you go in the United States to be fully immersed in automotive culture and industry."

Smith said Waymo will find abundant labour supply at a lower cost than in California, where it is now headquartered.

The announcement confirms that Waymo will use the Michigan factory to produce a large number of vehicles for ride-hailing services in many cities, Smith said. But it did not say when it will deploy the vehicles without human backup drivers.

"This is an announcement about a facility to be, and the cars that will come from that facility one day," Smith said. "What this is is that Waymo plans to eventually expand. They've been setting that foundation for a couple of years now."

Michigan Economic Development Corp. CEO Jeff Mason said Silicon Valley companies are increasingly interested in relocating to or expanding in the state. He cited KLA-Tencor's plan to open a $70 million semiconductor research-and-development centre in Ann Arbor and Samsung SDI's plan to build a $60 million-plus electric vehicle battery pack plant in Auburn Hills.

Ann Arbor-based auto industry expert David Cole told CBC News this development bodes well for the entire area.

"I think the good news is that this area, the Windsor, Ontario, Michigan area is going to be one of the preeminent areas in terms of both manufacturing and developing technology for a long long time," said Cole.

He foresees more collaboration between the auto industry and silicon valley in the future, partly due to a shortage of skilled talent to replace retiring baby boomers.