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Can Detroit Beat Googleto the Self-Driving Car?Inside GM's fight to get to thefuture first.By Keith Naughton | October 29, 2015

Illustrations by Bratislav Milenkovic

From (http://www.bloomberg.com/businessweek)

(http://bloomberg.com/)

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“I like to drive cars,” says Mark Reuss, product development chief atGeneral Motors, “so this is a little funny.”

Not funny-ha-ha, Reuss clarifies, but funny-odd. He’s sitting in thedriver’s seat, with his hands on his thighs and his feet on the floor of abig Cadillac that’s driving itself around a banked oval.

Reuss is at GM’s 4,000-acre proving ground in rural Michigan, hiddenfrom the public behind locked gates, tall trees, and security befitting aprison. The company’s been debugging its cars here since 1924. It’s abrilliant, sunny autumn afternoon—a nice day for being driven. Dozensof tests are going on, though it appears that his is the only one where noone’s holding the wheel.

Reuss is on edge. He forces a nervous laugh as the car takes itself up to70 miles per hour. If he has any fast-twitch impulses rocketing acrossthe synapses of his brain—Take the wheel, damn it!—he doesn’t give in.

“This is the cat’s meow,” he says.

Cadillac, which was two decadesold when flappers were sayingthings like “the cat’s meow,” willbe the first GM make to comewith Super Cruise, thecompany’s most ambitioustechnological foray sinceautomatic transmission. Thesystem isn’t fully autonomous.Pairing adaptive cruise controlwith lane-centering technology,it will allow drivers, or whateverthey’re called in the future, to letthe car take over only on thehighway. It will also, if all goesaccording to plan, propel GMinto a multibillion-dollar race forthe future of human mobility.

The question is whether GM canget to the future on time. SuperCruise won’t hit the market until2017. Elon Musk has just begunoffering autopilot

Featured in Bloomberg Businessweek, Nov. 2, 2015. Subscribe now.(https://subscribe.businessweek.com/servlet/OrdersGateway?cds_mag_code=BWK&cds_page_id=190089)Source: Alamy (2); Corbis (1)

(http://www.bloomberg.com/news/articles/2015-10-14/tesla-software-upgrade-adds-automated-lane-changing-to-model-s) on his TeslaModel S. Mercedes-Benz(http://www.bloomberg.com/news/articles/2014-09-18/mercedes-benz-to-test-self-driving-cars-on-california-roads), BMW, Audi, and Volvo

have similar hands-free driving systems in the works. Then there’sGoogle, which wants to skip the half-measures and do a full-onmoonshot: totally autonomous cars that, regulators willing, won’t evencome with a steering wheel or gas pedal. Google’s latest prototypes arealready driving themselves around Silicon Valley(http://www.bloomberg.com/news/articles/2015-05-15/google-s-own-self-driving-cars-set-for-public-road-test), where they’re known as

Koala cars because of their bulbous shape, and they may be available forpurchase right around the time GM’s hands-free Caddy hits showrooms.

Google, especially, has Reuss’s attention. Last year he declared it “a veryserious competitive threat.” At other times, he’s been snappish: “We’rein the car business today, and they’re not,” he said over the summer. Buton the GM test oval, as he rides in the Super Cruising Caddy, he’s talkingpeace, perhaps even alliance. “I’m not sure it’s an us-vs.-them thing,” hesays. Whether or not that partnership comes to pass (they already worktogether on some smaller stuff), Reuss, 52 and a GM lifer, says it’simperative that he …

Suddenly a crescent-shaped light on the steering wheel goes from greento red and the Caddy starts drifting in its lane. Reuss grabs the wheel. Atest car just whooshed by on the left, and another slowed down on theright—too much traffic for Super Cruise, making it shut down.

“That’s stuff we need to just work on,” Cindy Bay, the project’s headengineer, says from the back seat.

“Yep,” Reuss says, hitting a couple of buttons to restart Super Cruise.“We need to develop it.”

“It’s like saying, ‘If I work really hard at jumping, one day I’ll just beable to fly.’ ”

That’s Chris Urmson, the technical director of Google’s car program,during a TED Talk in May. “The prevailing philosophy is that we’regoing to take the driver-assistance systems that are in the vehicle today,and we’re going to incrementally make those better and better. And

eventually we’ll get to this point where we have self-driving cars.”Urmson’s speech, viewed 1.4 million times at ted.com, is classic SiliconValley disdain for Detroit.

That kind of talk annoys Reuss, who maintains that GM can disruptwith the best of them. He uses the term 14 times the afternoon of thetest drive. How to pay for that disruption is the challenge. Google,deriving profits from its ubiquitous search engine, one of the mostprofitable businesses ever devised, has the luxury of taking a clean-sheet approach. It has a profit margin of about 22 percent and a$495 billion market capitalization—more than triple the size of GM,Ford, and Fiat Chrysler combined.

GM, whose profit margin is less than half of Google’s, can’t pour endlessamounts of money into developing a driverless car. (Neither companywill disclose what it’s actually spent on the technology.) But it has tofinance its disruption somehow. In a sense, Reuss explains, thecompany has no choice but to be incremental, slowly seducingcommuters and selling ever more cars—at fatter profits—as thetechnology improves.

The CT6, Cadillac’s flagship sedan, will be the first model with SuperCruise. The technology isn’t easy to spot. Hidden behind the car’srearview mirror is a camera that identifies lane lines and objects ahead.Two short-range radars are embedded in the front bumper, and one

long-range radar peeks out from behind the grille. The camera’sprimary function is to keep the car centered in its lane; the radars workmostly to detect approaching objects and keep the car a set distancefrom traffic. All that data feeds into two computers locked in aluminumboxes tucked beneath the spare tire in the trunk. The computersanalyze the sensor inputs in real time and tell the car when toaccelerate, brake, and turn.

Super Cruise doesn’t have one of those spinning coffee-can things onthe roof, like the ones you see on Google prototypes. Those are lidarsensors—light radar, a highly precise technology that uses lasers to readobjects to the millimeter. Lidar is still expensive—about $50,000 for oneunit—though Velodyne, a major supplier, has said it’s taking that pricedown to $8,000. GM hopes to include lidar in the next-generation SuperCruise. Google is developing its own version in-house. Its adorableKoala cars have lidar rigs affixed to the hood, looking like a button nose.

But the technological differences are really just the beginning of thedisruption Google has planned. In Google’s world, you won’t just quitdriving cars, you’ll also quit owning them. Forget about investing in anexpensive and depreciating asset that sits idle 97 percent of every day.Fleets of autonomous vehicles will circulate through your town, pickyou up when you summon one via smartphone—or smartwatch or brainimplant or whatever—drop you off, and move on to the next fare.

In other words, Google doesn’t want to sell you a consumer product, buta mobility service, says Sebastian Thrun, a Stanford professor ofartificial intelligence who ran Google’s car project for four years until2013. “Obviously, once you get into the pure services world, that’s theend of Detroit,” he says.

Reuss lets out a staccato laugh at the prospect. “I don’t know aboutthat,” he says. “That’s a pretty dramatic comment.” And yet he acceptsthe premise that car sales will dramatically diminish as personaltransportation becomes more service-based. In his vision of the future,GM will play in both worlds, producing autonomous cars to be used asrobo-taxis and human-controlled models for the diminishing segmentof society that will still wants to drive. It’s a risky strategy ofreinvention, and that’s why Reuss acknowledges GM will need partnersto pull it off.

One thing is certain: If GM stays with its current car-selling model, it’llgo out of business. “Yep, we’re done,” he says of sticking to business asusual. “I like being in those kinds of situations. It’s kind of like

Apollo 13.” He means the part about the resourceful astronauts fixingtheir broken capsule while hurtling through outer space, not the partabout how they never made it to the moon.

GM has been talking about self-driving cars since its Futuramadisplay at the 1939 New York World’s Fair. By the 1940s, its promotionalfilms showed families playing cards around a table while their car droveitself. In the 1950s, GM developed a turbine-powered concept car knownas the Pontiac Firebird, years before the muscle car of the same name,that could be switched to autopilot after getting the OK from a controltower.

In 2007, GM teamed up with Carnegie Mellon University to win theDarpa Urban Challenge (http://archive.darpa.mil/grandchallenge/), runby the U.S. Defense Department's research arm. GM’s heavily modifiedChevy Tahoe successfully navigated a city course on its own to win a$2 million prize. The feat “made this very singular statement thatautomated driving is no longer science fiction,” says Raj Rajkumar, anengineering professor who co-directs GM’s Autonomous DrivingResearch Lab at Carnegie Mellon.

Then came the Great Recession. By 2009, as GM was descending intobankruptcy, a small band of its engineers and researchers agitated forproducing driverless cars. A much larger group of more cautiousexecutives found the idea reckless, says John Capp, GM’s director ofsafety, who oversaw development of Super Cruise. “We were graspingfor life jackets,” he recalls of GM’s struggle to survive. Pre-bankruptcy,the traditionalists would have won. But with the government bailoutcame new management, which was finally convinced to invest in self-driving technology. What persuaded them were the billions that GM’s

foreign competitors, including Mercedes-Benz and Toyota, werecommitting to similar research(http://www.bloomberg.com/news/articles/2015-10-06/toyotas-merge-onto-highway-hands-free-as-driverless-views-evolve).

And of course there was that other competitor. “There was a sense inDetroit that people at Google were going to do something foolish,” saysChris Gerdes, director of Stanford’s Center for Automotive Research(http://www.bloomberg.com/news/articles/2015-10-07/a-stanford-professor-s-quest-to-fix-driverless-cars-major-flaw), who works withautomakers on driverless-car research. “But there are a lot of smart folksat Google.”

If Reuss used to be dismissive about Google, he isn’t at the test track. “Ilove the company,” he gushes. “I love the people in it.” (This comingfrom a man not known for expressing much affection in the workplace:Reuss once sent an e-mail to an underling to express his displeasureafter the employee used the milquetoast word “competitive” to describeGM’s models. Reuss’s subject line: “Vomit.”) GM already incorporatesthe Android Auto touchscreen infotainment system from Google intoits dashboards. “I love working with them,” he says. “I think they feelthe same way.”

He wants to take this affection to the next level. “We make cars, weknow how to make cars,” he says. “They’ve got great technicalcapabilities. We are very interested in how those two might worktogether.”

Google declined to discuss whether it’s interested in teaming with GMon autonomous cars. However, co-founder Sergey Brin said in October,“We are really focused on working with partners” and added that theycould include major automakers. Clearly, the courtship is in its earlystages.

“One guy reached around andpulled a newspaper out of the

back seat and just startedreading it. He just assumed

the car was going to go along

forever, perfectly safe”

Super Cruise is acting up again. After a demonstration of how it canautomatically slow the Caddy from 70 mph to 40 mph and remaincentered in a lane, the car drifts slightly and the steering wheel lightturns red. System shutdown.

The problem this time is glare from the sun, which blinded the rearviewmirror camera. It’s a problem Reuss and his team have seen before.

“This will keep us very busy over the next week,” Bay pipes up from theback.

“We need to work on that,” Reuss says.

Safety comes first, of course, but if the autopilot requires the driver totake the wheel too often, then customers won’t see any benefit andwon’t pay up for it. And GM is banking on Super Cruise to further boostprofits, which have risen rapidly since the company emerged frombankruptcy six years ago. Reuss says GM is intent on expanding itsprofit margin above 10 percent, more than double what was consideredhealthy in the pre-bankruptcy days.

Finding the right balance between human and machine control takes alot of work. “It’s about, how much feedback is enough without beingannoying?” Reuss says. To speed things up, GM simplified the system. Itwill operate only on highways, so it doesn’t have to deal with crossingtraffic, stoplights, or children playing along the road. The company alsoditched a plan for an automatic lane-changing feature, where the drivercould switch lanes at the push of a button or the car itself could evensense it needs to move over.

Early in GM’s work on Super Cruise, its consumer research showed thatregular drivers became comfortable with autonomous technologysurprisingly quickly. While taking a spin in a Chevy Malibu equippedwith an early version of the technology, one test subject after anotherzoned out and found other things to do, such as texting or eating. “Oneguy reached around and pulled a newspaper out of the back seat andjust started reading it,” says GM’s Capp. “He just assumed the car wasgoing to go along forever, perfectly safe.”

forever, perfectly safe”

So GM developed countermeasures to make sure drivers keep their eyeson the road and stay ready to take the wheel. For example, Super Cruise-equipped cars will have a camera nestled among the gauges behind thesteering wheel that continuously scans the driver’s eyes and face. If thedriver isn’t watching the highway, the seat begins vibrating. If thatdoesn’t get the driver’s attention, alarms sound and the steering wheellight turns from green to blue to red. If that still doesn’t do the trick, thesystem will slow the car down and, if necessary, bring it to a stop.

There’s nothing alarming about how long it’s taking Super Cruise tocome together. The technology is hard, even by Silicon Valleystandards. “We’re being especially cautious at this early stage,” Musksaid in October as he introduced Tesla’s autopilot. His system canhandle lane changing but requires drivers to hold the wheel at all times.None of the Koalas Google has driving on public roads are for sale.There are still many thorny issues—some technical, some ethical. Forexample, if a collision is unavoidable, should a driverless car beprogrammed to always aim for the smallest object(http://www.bloomberg.com/news/articles/2015-06-25/should-a-driverless-car-decide-who-lives-or-dies-in-an-accident-) to protect itsoccupant? What if that small object is a baby carriage? GM is wrestlingwith the same issues as it tests its self-driving Cadillac SUVs on publicroads in Michigan and near Carnegie Mellon in Pittsburgh.

Reuss allows that Super Cruise is a ways off from truly autonomousdriving, but it’s a big step in that direction. He unzips a valise and pullsout some internal documents, which he flashes but refuses to handover. He says they contain GM’s road map to autonomy, starting with“Driver in charge” in 2010, progressing to “Driver mostly in charge” thisyear, to “Car mostly in charge” in 2020, and finally “Car in charge” in2025.

The road map, Reuss says, will lead GM into the bright, post-car-ownership future, where transportation is a service and driving is forhobbyists. GM could provide propulsion systems that power GoogleKoalas, fleets of Uber taxis

(http://www.bloomberg.com/news/videos/2015-09-16/how-a-driverless-future-could-impact-uber), or even Apple cars, should that companydecide to make them. It will also produce and sell its own autonomouscars, though Reuss isn’t sure whether they’ll still be branded Chevysand Caddys. There’s plenty of time to figure all that out, he says,dismissing the prediction that driverless cars will be the death ofDetroit. “If it were going to switch overnight, maybe that wouldhappen,” he says, slipping his secret documents back into his valise.“But it’s not gonna switch over overnight.”

A big truck suddenly passes the Caddy on the left, while another vehiclestops on the shoulder. This time, Super Cruise handles the situation anddoesn’t shut down.

“Did you see that?” Bay asks from the back.

“It handled it all,” Reuss says proudly.

As soon as those words are out of his mouth, the Caddy starts driftingagain.

“This is not lane centering,” he says.

“It disengaged,” Bay says.

Reuss, squinting into the sun, punches the buttons on the steeringwheel.

“We’ve got some time,” he says, and carefully removes his hands fromthe wheel as Super Cruise resumes control. “We’re in not too bad aplace.”

—With Peter Waldman

A timeline of thedriverless past...

1939GM’s Futurama exhibit promises an automated highway system.

1957Jack Kerouac publishes On the Road.

1958Disney’s Magic Highway USA TV special imagines a future in which automated vehicles drive along colored highwaylanes, directed by punch cards.

1967Cruise control is introduced to the U.S. market.

1988Researchers at Carnegie Mellon outfit a Chevy van with a laser range finder and a camera, allowing it to drive apreprogrammed path on its own.

1995Carnegie Mellon’s NavLab 5 drives across the country  steering autonomously 98 percent of the time. Humans controlthe throttle and brakes.

1998Google is founded.

1999Autonomous cruise control, which maintains safe distances in traffic, is introduced.

2004Darpa’s first Grand Challenge asks teams to develop a fully autonomous vehicle capable of a 150-mile off-road race.The best competitor completes fewer than 8 miles of the course.

2007In Darpa’s third Grand Challenge, vehicles race through a 60-mile urban course while obeying traffic laws. The winningteam is from Carnegie Mellon and GM.

2011Nevada becomes the first state to pass a law allowing  autonomous vehicles.

2015Elon Musk offers autopilot on the Tesla Model S.

...and the future

2017GM introduces Super Cruise on the Cadillac CT6 Sedan.

2017Google releases self-driving cars without a steering wheel or gas pedal.

2017Autonomous vehicle sales, portion of all vehicle sales

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2020AVs are adopted in farming and mining. Excavators, forklifts, and other construction and warehouse vehicles soonfollow.

2020People employed as drivers begin to lose their jobs.

2025Fully autonomous cars are available to the general consumer for an additional $10,000.

2025Musk arrives on Mars.

2025Survey from 2014: How would you use your time in an autonomous vehicle?

2030Driverless technology takes over taxi and car-sharing fleets.

2035AVs reduce traffic congestion and make smaller and lighter vehicles  possible as roads become safer—resulting in fueleconomy gains.

2035The need for parking declines by more than 5.7 billion square meters.

2040Cheap  autonomous vehicles go on sale, making them affordable to lower-income people and reducing the use of publictransportation.

2040Good news/bad news: AVs free up 50 minutes of  productive time a day, but the easier trip encourages longercommutes and more sprawl. ,

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2045The majority of vehicle traffic is autonomous. More complex traffic patterns lead to  restrictions on human-drivenvehicles.

2050Most peak urban traffic is autonomous, allowing for narrower lanes and reducing congestion.

2050Platooning AVs can increase lane capacity by 500 percent.

2050Vehicle crashes decline as much as 90 percent from 2012 rates, saving $190 billion and more than 30,000 lives a year.

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2055As crashes decrease, liability shifts from drivers to automakers, and insurance is built into car costs.

2060Autonomous vehicles become mandatory.

Editor: Jim Aley

Producer: Laura Ratliff

Timeline: Stephanie Davidson

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