Sergio Marchionne on the Google Tie-In

In the first week of May, FCA announced that it was partnering with Google on autonomous cars, providing one hundred Chrysler Pacifica plug-in hybrid minivans and working in cooperation with the massive search-advertising company — an essential supplier to Allpar. Following is a partial transcript of FCA CEO Sergio Marchionne’s comments on the link, from a talk at the Windsor Assembly Plant, where the minivans are made.

press briefing

At the Windsor plant event celebrating the new Pacifica launch. FCA CEO Sergio Marchionne was asked about the recently announced partnership with Google on self-driving cars, which will use PHEV minivans to be built in the fourth quarter of 2016. He said:

It became clear to [Google] that we were probably the most open environment within which to operate, because we know what we do well. We know how to build cars and we know how to introduce relevant technology in these vehicles. But we’re also totally open-minded.

sergio at podium

We don’t have colored views about where the house [FCA] will go. So they found it ...  easy to work with us and to explore the work. Whether this is enough for them to feel comfortable to take it to the next step is unclear to me ...

If you take all the large automakers in Europe and the United States, you sum them all up, one tech company is going to market capitalization in excess of all those. It tells you a lot about what the economics of the future looks like. We appear to be at the wrong end of the wealth attribution arrangement here.

at windsor plantAlthough we work our buns off, and there’s a number of people you’ll see here in this plant who work diligently to make outstanding products, the economics of that transition from sheet metal into a product – into a beautiful product at the Pacifica end — seems to be completely lopsided.

And so some of [the tech companies] can buy us with their petty cash, which is a shocking concept, right? It’s almost an unfair match; when they come in and they decide to participate, we don’t have the winning hand. That’s why I think when you look at some of our competitors and see what they’ve done, they’re trying to even up the game by going in the wrong direction, saying “We’re going to try a different ramp.” The problem is that unequivocal bets which are costly both financially and in terms of time and [are they possible?] and that’s a very dangerous slope to be on. So I’m a lot happier being where I am today and being given an opportunity to learn and explore, than I am in making bets on the future. I’m not that good at it. I don’t think anybody is. You saw how long Google played with the Google car. They played for a long time.

The project is being run from Auburn Hills. Mr. Marchionne said.

As to why the Pacifica was chosen: “... the logical architecture of the Pacifica is strong enough to hold all the technology that Google needed to introduce to the vehicle. [There’s a] marriage of capability of the car as a vehicle and technical support for what they need to introduce as technology.”

sergio marchionne 2016Mr. Marchionne was asked if he had ridden in the Google car, and replied that he had, more than once.

I did it in California. I did it around Google’s headquarters. I don’t find it unsettling. I see this as having tremendous use in real life. It’s not sort of pie in the sky; the thing is real. And it’s coming. We can’t stop this.

I felt absolutely safe. Not because there was a guy sitting in the front who could step in in case the car went nuts, but because you can almost feel the reasoning process that the equipment was going through and assessing the objects and targets. It was like watching a robot execute and it executes well. It’s an unsettling feeling initially when you get in because you’re not in control, right? But the robot does it well. It does it really well.

You know, even since the last six months since I’ve been in the car, it’s improved and it keeps on improving. It learns and keeps on adapting. And the level of intrusion of sensors into that technology, which sensors you use and the ways in which you integrate them, is really a function of your ability – the computing power, to take all the signals and make sense of it. I think we’ve gone miles. I’m really excited. This is fun stuff.

I’m a lot more optimistic of the timing of the introduction of this technology than some others. People are talking about 20 years; I think we’ll have it here in the next five years. I think we need to work really hard for the regulators to agree to the paradigm because technology which is not vetted and approved within a regulatory environment is of little use to anybody. So we need to get that done.

sergio 2016On whether FCA had any participation in the technology:

Our engineers are expected to jointly work on the introduction of that technology in our cars. So we’re not the metal bashers that are putting holes into the body sheets. ... working and trying to understand what it looks like and what the implications are, we’ll come out of it wiser.

I think we need to change the way in which we’re developing these technologies if in fact this technology is going to become relevant, as I believe it will. So by definition, it’s a healthy thing for Fiat Chrysler to do. I think we’re thankful to Google that they picked us.

The capital investment was not a huge hit, Mr. Marchionne said, because they were doing the minivan anyway, and it will continue regardless of what happens with the technology. The attraction to Google, on the other hand, is that they don’t have to get into the capital-intensive, time-consuming auto production business: “I’ve told everybody I can get my hands on that you don’t have to build your own cars.”

The main audience for autonomous driving may not even be ordinary people with passenger cars or minivans:

Probably the easiest to access these things is people who transport goods on established routes and so on. It’s a known structure that does a variety of things. It’s long-driving hauls which would benefit from sort of a robotized intervention and the repeated execution of the same command over long distances. Cars have got more of a free will element to deciding where the ultimate destination will be. So I think it’s more complicated for non-transportation purposes, but for goods it should be a slam dunk. And we are working on that now if you’ve seen some of the European tests that have gone on in terms of even tandem – tandem solutions where you’ve got two trucks, one following the other, where the second one doesn’t have a physical driver. These things are coming.

When asked if Google had spoken with anyone else, Mr. Marchionne said, “It would be incredibly naïve on my part to think that I was the only guy on the planet. It is Google. If Google calls you, you normally answer. You may not like what they tell you, but you answer. I’m sure there’s somebody else that’s been called.” [Apple is rumored to have spoken with BMW and Mercedes, and been unhappy with the stipulations the companies made for a partnership.]

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