Ford's new station is actually a secret weapon

The station was opened in 1913, operating as Detroit's main station. It closed its doors in 1988, a symbol of the city's decadence. Ford purchased the building and land in 2018.

Trains will no longer enter or exit the station. Now, the facility will function in part as a transportation technology hub. Ford employees will use some of the space, as will start-ups. The goal is to create a place where large companies can cross-pollinate and attract top talent.

“Michigan Central will advance mobility solutions that help solve some of society’s greatest challenges. It will also be a powerful growth catalyst and economic engine for this region,” Ford President Bill Ford said in a press release.

The station is not a new car model, a new electric vehicle battery or a new driver assistance technology. Instead, it will incubate these technologies – and others – on the way to commercialization. One of Michigan Central's companies is working on wireless charging of electric vehicles, such as charging a car while driving or parking without having to plug it in.

Investors may not feel the station's impact on Ford for years. That's not to say it wasn't a good idea. The automotive sector is becoming increasingly competitive and complex, with fully electric cars, hybrid cars and traditional gasoline cars competing for market share, while driver assistance technology gets better and better. in addition.

That complexity is part of why BofA Securities analyst John Murphy calls this period one of the most difficult in auto industry history for companies that must plan their future product lines.

Initially, some Ford electric vehicle employees will move to Michigan Central. Ford's EV business lost about $1.3 billion in the first quarter. The profitability of electric vehicles is “the most important question in the auto industry,” said Ford CEO Jim Farley. Barron's. “This will require cutting-edge engineering, cutting-edge manufacturing and groundbreaking supply chain negotiations with our suppliers. This is going to require an incredible new innovative approach.

Part of that approach resides in a massive Beaux-Arts building in the heart of Detroit.

Ford stock was down 0.7% as of midday Monday at $12.04 a share. THE

S&P500

And

Nasdaq Composite

were down 0.6% and 0.2%, respectively. Ford shares have been essentially unchanged since the start of the year.

Write to Al Root at [email protected]