Volkswagen Group finalized Tuesday its $2.6 billion investment into Argo AI, the Pittsburgh-based self-driving car startup that came out of stealth in 2017 with $1 billion in backing from Ford.
The deal turns Argo into a global company with two customers — VW and Ford — as well as operations in the U.S. and Europe and an instant jump in its workforce. Autonomous Intelligent Driving, the self-driving subsidiary that was launched in 2017 to develop autonomous vehicle technology for the VW Group, will be absorbed into Argo AI. AID’s Munich offices will become Argo’s European headquarters.
That integration, which can begin now that the deal has closed, will expand Argo’s workforce to more than 1,000 people. Argo also has offices in Detroit, Palo Alto, and Cranbury, New Jersey. The company has fleets of autonomous vehicles mapping and testing on public roads in Austin, Miami and Washington, D.C.
Argo AI is developing the virtual driver system and high-definition maps designed for Ford’s self-driving vehicles. That mission now expands to VW. Ford and VW will share the cost of developing Argo AI’s self-driving vehicle technology under the terms of the deal.
“Building a safe, scalable and trusted self-driving service, however, is no small task. It’s also not a cheap one,” Ford Autonomous Vehicles LLC CEO John Lawler said in a blog post.
Two years ago, Ford said it would spend $4 billion through 2023 in a newly created LLC dedicated to building out an autonomous vehicles business. Ford Autonomous Vehicles LLC houses the company’s self-driving systems integration, autonomous-vehicle research and advanced engineering, AV transportation-as-a-service network development, user experience, business strategy and business development teams.
Lawler emphasized that “sharing development costs” doesn’t mean Ford is reducing its overall spend in autonomous vehicles. Instead, the company said it will reallocate money towards development of transportation as a service software and fleet operations for its eventual self-driving service.
Despite this shared investment, Ford and VW will not collaborate on the actual self-driving vehicle service.
Lawler, who is also vice president of mobility partnerships at Ford, said the U.S. automaker “will remain independent and fiercely competitive in building its own self-driving service.”
Argo’s board will now be comprised of two VW seats, two Ford seats and three Argo seats.
Ford said Saturday it will test hourly and salaried employees with suspected COVID-19 symptoms in four metro areas where it has major operations as it prepares to reopen facilities this month.
The automaker is expected to resume production and some operations at its North America facilities May 18. Aside from factory workers, Ford is also bringing back about 12,000 employees whose jobs cannot be done remotely such as vehicle testing and design. The company’s parts distribution centers reopened in North America on May 11.
Ford said it will initially use polymerase chain reaction (PCR) testing, which identifies if someone is actively infected. PCR tests are used to detect the presence of viral RNA, not the presence of the antibodies, which are the body’s immune response.
The automaker said it has signed contracts with health systems to conduct the testing. Ford will work with Beaumont Health for testing in Southeast Michigan, the University of Louisville Health in Louisville, Liberty Hospital in the Kansas City area and the University of Chicago Medical Center and UChicago Medicine-Ingalls Memorial Hospital in the Chicago area.
Collectively, Ford employs more than 72,000 people in Southeast Michigan, Louisville, Kansas City and Chicago.
The contracts will enable Ford to test employees with suspected symptoms with a goal of getting results back within 24 hours, according to the automaker’s medical director Dr. Walter Talamonti.
Testing results will be simultaneously shared with Ford doctors to help identify other employees who might have been in close contact with an infected worker. Those employees will be required to self-quarantine for 14 days.
The company is working on expanding testing, Ford CTO Ken Washington said in a statement. Washington added that Ford is looking into voluntary antibody testing in the future for its employees.
Ford released May 1 a back-to-work playbook that describes the protocols that it will put in place once production at its factories resume. Employees will have to complete a self-certification health check daily and have their temperature scanned upon arrival to any Ford facility. Face masks will also be required. Safety glasses with side shields or face shields will be required when jobs don’t allow for social distancing.
But according to data tracker Layoffs.fyi, the cuts have affected certain job roles more than others.
Sales and customer success roles are the most affected by post-coronavirus startup layoffs, crowd-sourced data shows. Other top categories include engineering and operations roles.
Earlier this month, restaurant tech startup Toast cut 50 percent of staff. About 70% of those laid off were in the sales or customer success roles. In restaurant review platform Yelp’s layoffs, 67% of cut positions were in the same bucket.
Equity management startup Carta laid off people, too, and about 47 percent of those cuts were in the sales or customer success roles.
It is not hard to make sense of why sales and marketing roles are the most impacted. The very function of these jobs is tied to a healthy market.
Sales and new deals have slowed or halted altogether for many businesses during the COVID-19 pandemic. This is because social distancing, and overall economic weariness, might not have people spending as much as they normally would have.
The cuts filter out disproportionately to other startup ecosystems, as sales and marketing roles are often based in satellite offices.
But the cuts don’t just impact sales. In a number of cases, layoffs in one department adversely impact all departments of the company. For example, Carta’s CEO Henry Ward noted that reductions across sales, marketing, onboarding and support will likely seep into other roles as well.
“As those departments become smaller, many of the teams that support those departments like recruiting, HR, operations, and parts of R&D, have to downsize with them,” Ward wrote in a Medium post. “Even though the analysis starts with customers, it quickly starts affecting all parts of the organization. This makes sense. We exist only because our customers exist and allow us to serve them. And when our customers suffer we suffer too.”
The graph below shows a makeup of roles impacted by COVID-19 related layoffs.
Engineers aren’t immune either. According to the report, engineers historically land high, competitive salaries versus sales roles, which largely are based on commission. In some cases, it means that a company trying to dial back costs needs to look at the highest-paid roles and slim accordingly.
Ford has expanded its plan to make critical medical equipment and supplies, including a new effort to make reusable gowns from airbag materials as well as a partnership with scientific instrument provider Thermo Fisher Scientific to ramp up production of COVID-19 collection kits to test for the virus.
This broader plan highlights the latest effort by automakers and medical device manufacturers to help ease a shortage of equipment and supplies such as face shields, face masks, protective gowns and ventilators, a medical device that is used in the treatment of COVID-19, a disease caused by coronavirus.
Ford announced in March a partnership with 3M to build Powered Air-Purifying Respirators (PAPRs) as well as a separate effort to produce more than 3 million face shields at its factory in Plymouth, Mich.
On Monday, Ford provided an update on its 3M partnership and laid out new plans to produce other medical equipment. Ford will start Tuesday producing PAPRs — respirators used by healthcare workers that filter out contaminants in the air — at its Vreeland facility near Flat Rock, Mich. Paid United Auto Worker volunteers will be working to assemble the PAPR devices. Ford said it expects to be able to make 100,000 PAPR devices.
Ford will start producing an all-new PAPR design to help protect health care professionals on the front lines fighting COVID-19.
“I think our immediate focus is on the surge need that is really at the end of April, May and June, so we’re focusing on that timeframe,” Jim Baumbick, vice president of Ford Enterprise Product Line Management said during a call with reporters Monday. “What I can also say is we have very clear signals working with our partners that three on that the demand is far outpacing the supply of this critical equipment. We know that there’s incredible demand, and need for this during this short time horizon.”
Ford engineers have also been working to increase the output of PAPRs and N95 respirators at 3M’s U.S.-based manufacturing facilities. 3M has doubled its N95 production to more than 1.1 billion annually and has plans to double that again in the next 12 months, according to Mike Kesti, the global technical director of the personal safety division at 3M.
In addition to its previously announced plans to make face shields, Ford outlined three additional efforts, including face mask and gown production as well as the partnership with Thermo Fisher Scientific.
The company has started to produce face masks for its own workers to use throughout its global operations. The face masks, which are being made at Ford’s Van Dyke Transmission Plant in Sterling Heights, Mich., were developed in collaboration with the UAW and are being made for internal use to lessen the burden on an already squeezed supply chain. Ford said it is looking to have the masks certified for medical use.
Ford has also tapped supplier Joyson Safety Systems to make reusable gowns from airbag material. The automaker worked with a local hospital in Michigan to develop a pattern for the gowns. The airbag material used for the gown is nylon based and has built in coating.
“This is really a great find that we could take something that we already knew how to produce and then turn that into isolation gowns, and they are washable,” said Marcy Fisher, Ford director of global body exterior and interior engineering.
Ford-supplier Joyson Safety Systems will cut and sew 1.3 million gowns by July 4. The gowns are self-tested to federal standards and are washable up to 50 times, according to Ford.
Finally, the company said it will help Thermo Fisher Scientific expand production of COVID-19 collection kits. Ford engineers at its Kansas City Assembly Plant are helping set up additional collection kit production machinery. These engineers are also helping Thermo Fisher adapt machinery that currently runs glass vials for other products to run plastic vials required in drive-through coronavirus test collection.
Despite false assertions by the president to the contrary, any potential treatments to counter or prevent COVID-19 are still only at the stage of early investigations, which include one-off treatment with special individual case authorizations, and small-scale clinical examinations. Nothing so far has approached the level of scrutiny needed to actually say anything definitively about their actual ability to treat COVID-19 or the SARS-CoV-2 virus that causes it, but the first large-scale U.S. clinical study for one treatment candidate is seeking volunteers and looking to get underway.
The study will be conducted by the Henry Ford Health System, which is seeking 3,000 volunteers from healthcare and first responder working environments. Depending on response, the researchers behind the study are looking to begin as early as next week. Study lead researcher Dr. William W. O’Neil said in a press release announcing the study that the goal is to seek a more definitive scientific answer to the question of whether or not hydroxychloroquine might work as a preventative medicine to help protect medical front-line workers with greater risk exposure from contracting the coronavirus.
Hydroxychloroquine (as well as chloroquine) has been in the spotlight as a potential COVID-19 treatment due mostly to repeated name-check that President Trump has given the drug during his daily White House coronavirus task force press briefings. Trump has gone too far in suggesting that the drug, which is commonly used both as an anti-malarial and in the treatment of rheumatoid arthritis and lupus, could be an effective treatment and should be thrust into use. At one point, he claimed that he FDA had granted an emergency approval for its use as a COVID-19 treatment, but Dr. Anthony Fauci clarified that it was not approved for that use, and that clinical studies still need to be performed to evaluate how it works in addressing COVID-19.
Studies thus far around hydroxychloroquine have been small-scale, as mentioned. One, conducted by researchers in France, produced results that indicated the drug was effective in treating those already infected, particularly when paired with a specific antibiotic. Another, more recent study from China, showed that there was no difference in terms of viral duration or symptoms when comparing treatment with hydroxychloroquine with treatment using standard anti-viral drugs, already a common practice in addressing cases of the disease.
This Henry Ford study looks like it could provide better answers to some of these questions around the drug, though the specific approach of seeking to validate prophylactic (preventative) use will mean treatment-oriented applications will still have to be studied separately. The design of the study will be a true blind study, with participants split into three groups that receive “unidentified, specific pills” (possibly anti-virals or some equivalent); hydroxychloroquine; or placebo pills, respectively. They won’t know which they’ve received, and they’ll be contacted weekly by researchers running the study, then in-person both at week four and week eight to determine if they have any symptoms of COVID-19, or any side effects from the medication. They’ll get regular blood draws, and the results will be compared to see if there’s any difference between each cohort in terms of how many contracted COVID-19.
These are front-line healthcare workers, so in theory they should unfortunately be at high risk of contracting the disease. That, plus the large sample size, should provide results that provide much clearer answers about hydroxychloroquine’s potential preventative effects. Even after the study is complete, other competing large-scale trials would ideally be run to prove out or cast doubt on these results, but we’ll be in a better position than we are now to say anything scientifically valid about the drug and its use.