Reuben Sarkar sees the future again at Willow Run, where he launched his career 20 years ago.
Sarkar, 45, of Saginaw got his start as a materials engineer at General Motors Powertrain Transmission in west of Detroit before working his way up to lead design release engineer for the Chevy Volt electric drive unit.
Shortly after the automaker shuttered its Willow Run plant as part of its bankruptcy in 2009, Sarkar left Michigan for greener pastures. He helped build startups in Colorado and South Carolina, and he worked for 3 1/2 years on the East Coast as deputy assistant secretary of sustainable transportation for the U.S. Department of Energy.
His latest career move brought him back to his old stomping grounds. As CEO of the American Center for Mobility, he is tasked this time not with creating the technology of the future, but with incubating and showcasing it at one of the country’s most unique test labs.
“I knew about ACM long before it was built out because I was in Washington, D.C., when the state was out there basically trying to pitch the idea of this advanced mobility test center,” Sarkar said during a recent interview at the ACM’s campus, sprawled across 500 acres once home to GM’s powertrain plant. “The stage that it was at was really the more important decision factor for me because the infrastructure was built out and they were in need of business development, and that’s what I do.”
The ACM is at a critical point of its nearly four-year existence — it’s time for the proving ground to prove its own viability. Sarkar laid out a broad vision for the mobility hub that extends beyond just its test track. He took the leadership role in April 2020, days before the ACM closed due to the COVID-19 pandemic, and he now has more runway to make big changes to the business.
“There’s a track at the core, and (there is) the rest that we can be,” he said. “I had this feeling that there was more opportunity here than what was potentially being considered in terms of the kind of businesses and services that you can provide. It’s basically a product-market fit — what does the market really need from you?”
The electric, autonomous future of the auto industry has turned out to be further down the road than experts predicted back in 2018 when the state proclaimed the ACM as ground zero for the future of autonomous vehicles. It’s a future that’s yet to be realized, with researchers now looking out a decade or more for fully driverless cars in urban settings.
At the same time, startups and legacy automakers are racing to develop new technology, and the methods of testing it are rapidly changing.
That’s perhaps the biggest threat to the ACM.
It now faces competition from public roads, including in Michigan, that have been approved for driverless vehicle testing.
“I think the market has changed drastically,” said Trevor Pawl, chief mobility officer for the state. “As the technology is being developed faster by more people and more companies around the world, it’s skipping that testing component. … What role does the testing center actually play? We think it plays a massive role, and it can prevent things like what happened with some of the Tesla accidents that we’ve seen where people have lost their lives.”
Ensuring that the ACM is part of the future it hopes to enable requires financial stability. Under Sarkar’s watch, that has meant driving up revenue by lowering rental costs and experimenting with new revenue streams for growth.
According to Sarkar, the ACM is expected to hit a break-even point within the next year after tripling track usage since the fall.
“We’re on a trajectory to being sustainable,” he said. “There was a lot of investment that came into ACM to build it out. Now the track is coming up to speed in terms of running as a business.”
Added Dawn Thompson, director of strategy, marketing and programs for the ACM: “We were sort of ahead of the curve in building ACM, and now it’s catching up to the technologies.”
The center is run by a nonprofit in tandem with the Michigan Department of Transportation, the Michigan Economic Development Corp., the University of Michigan, Ann Arbor’s Spark business accelerator and Ypsilanti Township.
The state invested $60 million to buy the Willow Run site and help redevelop it.
After a “listening tour” with stakeholders, one of Sarkar’s first moves was to revamp the pricing structure of the test track. The result was a surge in use.
“There’s this belief that you have to charge more to generate more, and I’ve learned in a lot of places that actually, quite the opposite is true,” Sarkar said. “We went out and benchmarked ourselves, and I think we’re seeing the output of that right now.”
Sarkar said the track is occupied nearly 75 percent of the time it is available and that the center plans to expand hours of operation to accommodate demand. He declined to disclose rental rates, citing competitive reasons.
The closed track includes a host of driving environments to replicate virtually any scenario found on the streets of the real world. Environments include a 2.5-mile highway loop with exit and entrance ramps and triple-decker bridges, a 700-foot curved tunnel, urban arterial road, six-lane boulevard, two-lane roundabout, urban canyon, a parking lot, sidewalks and bike lanes. It also has cybersecurity testing, a private 4G LTE cell network, Wi-Fi and 5.9 Ghz DSRC roadside units, technology that allows vehicles to communicate with the infrastructure.
Another key aspect of Sarkar’s business plan is to dispel the misconception that the ACM is a members-only test track reserved for the big automakers. The automakers may be self-contained and cagey about their testing, but many of the startups are eager for attention, and the ACM knows how to bring it.
“We want to be more than a test track,” Sarkar said. “We want to be an ecosystem that brings you value, connections, networking, business opportunity. Small startups want exposure. They want to be able to walk around and meet new people and get new business.”
That’s the case for Perrone Robotics Inc., a Virginia-based autonomous vehicle startup that began leasing a 1,200-square-foot garage at the ACM in late June. The company recently landed a $10 million investment from Florida-based CapStone Holdings Inc., whose CEO, Keith Stone, is a graduate of and big-time donor to Eastern Michigan University.
“Strategically, we think ACM is a very important partner to work with in this ecosystem,” said Chao Sun, regional investment director for CapStone Holdings. “The marriage between ACM and Perrone is just the beginning. In the future, we would love to see more research and work together with EMU, and work more with the private sector.”
Sun said Perrone will take part this fall in the ACM’s demo days, when startups from around the Midwest and beyond convene to show off technology and share ideas.
“Because (Perrone) is in Virginia, it is very rare they have the channel to meet the OEMs or the potential investor or potential customer, so we really value this platform,” he said.
Marketing, business-to-business services and events are a growing source of the center’s revenue, though Sarkar declined to offer percentages.
In April, officials signed a memorandum of understanding with Detroit area firm Humanetics, allowing the company to offer its safety test equipment to ACM customers. It reached a memoradum of understanding earlier this year with Minneapolis-based VSI Labs to host a series of events at the ACM using VSI’s research vehicles.
The ACM declined to offer financial details of those deals.
Garage rentals are another revenue source — the campus has six 2,000-square-foot garages with veranda office space and seven 1,200-square-foot garages — but after bringing in Perrone, capacity is full. The ACM does not disclose the names of tenants or clients, but its founding investors and users include Visteon Corp., Toyota Motor Corp., Ford Motor Co., Hyundai America Technical Center Inc. and AT&T. Other sponsors include Subaru of America Inc., Adient plc and Microsoft.
One of the only unleased buildings left on the campus is a 15,000-square-foot event space, which is likely to be claimed by an undisclosed tenant soon. An announcement is forthcoming. Also expected in the fall are more details about the center’s expansion plan, set to potentially include new buildings on the campus, where 200 acres remain undeveloped.
The center announced in January 2020 that it planned to begin building a tech park on the campus but separate from the ACM base, However, it recently scrapped those plans in favor of building from the base outward in a “one campus approach.”
“Five years ago, it sounded like we needed a tech park,” Thompson said. “Now, we’re like wait a minute, do we really need a tech park, or do we need more garages, or a great big event space?”
Growth is still a priority even as the center looks to hit its stride under a new CEO, following a lot of leadership turnover since its launch.
“So, a lot of these places start off vision-centric, driven by a strong leader, and they have the vision, and they know what it’s going to be, and they need that momentum to charge forward,” Sarkar said. “And eventually you have to hit pause and think about it.”
Sarkar thinks that ancillary parts of the business could eventually become part of the core, but that does not mean neglecting the track, he said. Since launch, the center has seen upwards of $200 million invested in new mobility innovations that include infrastructure, facilities, technologies, and equipment, according to the ACM.
Sarkar sees the track at Willow Run playing a big role in the safe evolution of mobility for years to come. It allows for test scenarios that can’t happen safely on public roads, such as incorporating erratic maneuvers, scheduling controlled weather sessions, testing variable communications and connectivity levels, and validating interoperability between more than one manufacturer. The need for a controlled environment, he argues, will keep the ACM relevant even as tech companies try to streamline the validation process.
Pawl agrees.
“I think the capabilities, the 500 acres of multiple environments — urban, suburban, rural testing sites — all these different things I think have positioned ACM well to compete through 2030 and beyond,” he said.