Southeast Michigan is starting to look like northern California, minus the redwood trees, the year-round good weather and the crazy expensive housing.
Automotive startups and tech giants have been beefing up their presence in the Detroit area in an attempt to attract engineering talent away from traditional automakers, because those engineers don't want to move out West.
"We want to capture the talent that's here that doesn't want to go to California, possibly because a spouse is working or their children are in school, and they aren't ready to make that transition," said Helen Watson, human resources manager at Karma Automotive.
Karma -- known as Fisker Automotive before it was bought by Chinese company Wanxiang Group in 2014 -- is a boutique luxury hybrid automaker based in Los Angeles. In May, the company opened an engineering and sales office in Troy, Mich. The office houses 41 employees and has plans to scale up to 150 in the next three years, Watson said.
Opening an office in Michigan makes sense because that's where the talent is.
"There's been a crystal clear recognition that if you need to engineer fully integrated vehicles, the preponderance of talent to do that is in southeast Michigan," said Eric Noble, president of Car Lab, an automotive consulting company based in Orange, Calif.
Southeast Michigan is home to General Motors and Ford Motor Co. FCA has a large presence north of Detroit, and Asian automakers have facilities such as the Nissan Technical Center, the Hyundai-Kia America Technical Center and the Toyota Technical Center. Each of those places is a substantial source for automotive engineers. Schools in the region, including the University of Michigan, Michigan State University and Purdue University, consistently add to the talent supply as well, Noble said.
Many of those new and veteran engineers don't want to leave Michigan, where the median home price is US$270,000 (Cdn $362,000), according to personal finance website NerdWallet. Median home prices in San Francisco and Los Angeles are $1 million (Cdn $1.34 million) and $660,000 (Cdn $884,000), respectively.
Startups based in California have a tempting lure they use to poach engineers: They can get their hands dirty working directly on new cars. At bigger automakers, engineers are often relegated to a small slice of the car they're working on, like the brakes or steering systems.
"The big attraction is that we are a smaller company," Karma's Watson said. "These engineers, what they want to do is get their hands on the vehicle."
Watson said the main draw for engineers working at larger automakers has been Karma's ability to re-create the hands-on California startup office environment in Detroit.
Other tech companies are planting roots in the Detroit area. Google announced in May it is opening an office in Novi, Mich. John Krafcik, head of Google's self-driving car project, wrote in a blog post in May that the decision would help Google "access Michigan's top talent in vehicle development and engineering."
And in September, Sherif Marakby, Uber's vice president of global vehicle programs, said the San Francisco-based ride-hailing company would be opening a facility in the Detroit area. Though Uber is not building its own vehicles, it's working on self-driving technology and wants to collaborate with Detroit-based automakers and suppliers, Marakby said.
The trickle of new neighbors in Detroit is unlikely to stop soon. Nine times out of 10 vehicle engineering is going to happen in Michigan, Noble said. "It's where the engineering talent is."