Waymo to build self-driving cars in Detroit, invest $13.6 million in factory

DETROIT—Waymo has reached an agreement with American Axle & Manufacturing to lease a factory in Detroit, where it will integrate its self-driving systems onto vehicles provided by Fiat Chrysler Automobiles and Jaguar, the Google affiliate said.

Waymo will invest $13.6 million to adapt an existing plant within the supplier's Holbrook Avenue campus and could eventually grow to 200,000 square feet and hundreds of workers. The size of the footprint Waymo will open with later this year is not clear.

The move will create Waymo's first full-fledged assembly plant for the purpose of retrofitting vehicles with self-driving systems and marks an expansion into the cradle of the traditional auto industry.

In January, when Waymo laid out its ambitions to find a manufacturing facility in Southeast Michigan, it said as many as 400 engineers from Canada's Magna International Inc., a Waymo partner, eventually could be hired to perform the system integration. Waymo did not say how many employees would be hired initially.

"We've found the perfect facility in Detroit," Waymo CEO John Krafcik said. "We will partner with American Axle & Manufacturing to repurpose the existing facility, bringing a work force back to an area where jobs in the automotive industry were recently lost."

Mayor Mike Duggan welcomed the news.

"Waymo could have located the world's first 100 percent dedicated Level 4 autonomous vehicle factory anywhere," Duggan said. "We deeply appreciate the confidence John Krafcik and the Waymo team are showing in the Motor City."

Waymo worked with Dan Gilbert's Bedrock L.L.C. to find a space in Detroit.

"... Waymo's newest expansion only helps to affirm Detroit's position as the startup hub of the Midwest—making our city synonymous with high-tech innovation," Gilbert said in a statement.

Crain's reported in January that the project is supported by an $2 million grant from the Michigan Strategic Fund that covers the first 100 jobs—about $20,000 each—upon signing a lease for no less than three years. Waymo then could qualify for $20,000 for each new job at the site up to 400 new jobs or an additional $6 million in grants.

MichAuto, the automotive economic development division of the Detroit Regional Chamber, also is supporting the project by elevating Waymo's status in the nonprofit to a higher tier, an upgrade worth $25,000, according to an MEDC memo.

The facility will be the second in Michigan solely dedicated to producing Level 4 autonomous vehicles—those that never require human involvement in the driving process but may have weather-related and location constraints that limit their deployment to select areas.

Navya, a maker of self-driving shuttles, opened an assembly plant west of Detroit in Saline last year.

The building will be Waymo's second in Southeast Michigan. In October 2017, it opened a 53,000-sq.-ft. office at 46555 Magellan Drive in Novi to house vehicles used for testing in cold-weather conditions. About 20 people are employed there.

Waymo, the commercial-minded descendant of Google's self-driving car project, says it expects to be "up and running" by mid-2019. It will start by installing its self-driving systems onto Chrysler Pacifica minivans. At a later date, it will add the self-driving systems to Jaguar i-Pace electric vehicles.

Both vehicles will be used in Waymo One, the commercial ride-hailing service the company launched in December in Phoenix. At least for now, vehicles in operation still have human safety drivers behind the wheel and the service is limited to pre-approved riders.

Waymo has not yet announced plans for expanding that service or the size of its fleet, but with plans for its assembly plant in place, the groundwork has been set.

Crain's Detroit Business contributed to this report.