GM exec: Detroit area’s ‘talent deficit’ cost it Amazon

Correction: Dan Gilbert is chairman and founder of Quicken Loans. An earlier version of this story gave an incorrect title.

Detroit – Citing a missed chance at Amazon’s second headquarters as a dashboard warning light, General Motors Co. product chief Mark Reuss told the Society of Automotive Engineers World Congress here Thursday that the autonomous vehicle revolution will also bypass Detroit unless the region addresses its “talent deficit.”

“Look, it’s no secret why we couldn’t even make the final 20 cities on the list for Amazon’s potential second headquarters site,” said Reuss in a passionate keynote speech in Cobo Center. “It wasn’t because of a lack of mass transit, although that is important. It wasn’t because of a lack of cultural opportunities, or because of the weather. . . . It came down to a simple talent deficit.”

“Much of the future of the automotive industry is going to be determined and developed, right here,” he continued. “But only if we can develop, attract and acquire the engineering talent to do so.”

Saying that a historic shift to electrified, autonomous transportation is “all really happening,” Reuss outlined the challenge of educating more engineers as a national imperative. Currently, he said, the United States suffers labor shortages in every science, technology, engineering and math (STEM) field. In just two years the U.S. will face a shortfall of a half-million engineers, he said.

But Reuss focused his address here at home where Motor City automakers are investing billions in a sci-fi future — GM alone is in the middle of a $1-billion, 2,600-job expansion of its Warren Tech Center. He said anyone with a stake in Metro Detroit’s signature industry needs to focus on education.

“By my count, that’s just about everybody,” he said. “We have to meet or beat the talent levels in Silicon Valley and other technology hubs around the world.”

He didn’t spare SAE and industry business leaders. “I worry that we miss a lot of opportunities to really assume a leadership position,” he emphasized. “This industry is changing – fast.”

His stark diagnosis of Detroit’s failure to make Amazon’s Final 20 echoed, in part, what many regional leaders have said were the two major reasons — the other being a lack of mass-transit — that the region missed out on Amazon’s promise of 50,000 jobs and $5 billion investment.

Reuss’ comments contradict another prominent tech player in the region, Dan Gilbert, chairman and founder of Quicken Loans.

In a letter this January to the 60-member bid committee addressing Amazon’s decision, Gilbert dismissed concerns over talent and cited Detroit’s negative image as “the elephant in the room.”

“Old, negative reputations do not die easily. I believe this is the single largest obstacle that we face,” Gilbert wrote. “Outstanding state-of-the-art videos, well-packaged and eye-catching proposals, complex and generous tax incentives and highly compelling and improving metrics cannot nor will not overcome the strong negative connotations that the Detroit brand still needs to conquer.”

Patrick Anderson, CEO of Anderson Economic Group, and one of the state’s leading economists said Reuss’ speech confirmed his own 2017 study that correctly predicted Detroit would rank low on Amazon’s list due to a shallow labor talent pool and transit infrastructure.

“Our analysis found that Detroit is clearly hurting in a couple of areas,” the Lansing-based economist said. “Though I think mass transportation did hurt us with Amazon, the difficulty of educating our people hurts us every single day with every single employer.”

Despite the Amazon setback — and the warnings of giants like GM — Anderson says that many in the region refuse to accept reality.

“We’ve been criticized for saying this repeatedly,” he said. “But we consistently have shown a serious problem with K-12 education. It’s a fundamental problem that has not been remedied.”

In his speech, Reuss cited the efforts of GM and SAE in building regional educational opportunities as a good start.

A World In Motion, an SAE-organized, teacher-administered program that has brought hands-on STEM activities to K-8 students over the last decade, will receive $600,000 this year to support 1,800 volunteers. He singled out a Detroit college student, Brittany Agee, the first person in her family to attend college. She benefited from the “GM Student Core” program where company engineers mentor underprivileged kids.

“We need more Brittanys,” said Reuss. “We all need to ask how our companies can help do that.”

One of the auto industry’s greatest future concerns are self-driving systems’ vulnerability to hackers. To address this threat, Reuss said, GM and SAE have created a new program for 2018, “Cybersecurity Challenge,” designed to teach middle-schoolers how to protect the Internet’s architecture from cyber attacks.

“This is something (students) hear about all the time — whether it is companies being hacked, or individuals — it’s in the news a lot,” said Reuss.

Henry Payne is auto critic for The Detroit News. Find him at hpayne@detroitnews.com or Twitter @HenryEPayne.