The automotive industry is on the cusp of a transformation. It's going to evolve more over the next two decades than it did over the past 10. The race to develop fleets of driverless cars, in combination with mobility projects that aim to disrupt various segments of the transportation sector more radically than Uber did to the taxi business, will change transportation as we know it. But developing and perfecting the technology necessary to make all of that happen requires top-tier talent, and the greatest minds often head to Silicon Valley, not Detroit. That's a problem for Ford Motor Co. (NYSE:F) and General Motors (NYSE:GM) -- a problem they're working to fix.

A war for talent

The fierce competition to recruit and hold onto the top tech talent in the driverless vehicle space isn't an issue that will show up on a company's 10-K filing with the SEC, but figuring out how to lure the employees they need away from Silicon Valley is arguably one of the biggest concerns for automakers now. Fortunately, those companies recognize this, and are engaged in turning Detroit into an appealing landing spot for the talent they'll need to win the autonomous vehicle development race.

Let's start with Detroit's second-largest automaker, Ford. The folks at the Blue Oval are doing something interesting; they recently acquired the iconic Michigan Central Station, which closed 30 years ago. Here's why that matters. Ford's vision is to redevelop Michigan Central Station over the next three to four years into a campus with work spaces, retail, restaurants, and residential living. Ford intends it to be a hub where the automaker and its partners will work on autonomous vehicle technology, electric vehicle businesses, and solutions for a new transportation operating system.

Bill Ford standing in front of Michigan Central Station

Bill Ford at Michigan Central Station. Image source: Ford Motor Co.

"Michigan Central Station is a place that in many ways tells the story of Detroit over the past century, " said Executive Chairman Bill Ford in a press release. "We at Ford want to help write the next chapter, working together in Corktown with the best start-ups, the smartest talent, and the thinkers, engineers, and problem-solvers who see things differently -- all to shape the future of mobility and transportation."

Roughly 2,500 employees, largely from the mobility team, will call the new campus home by 2022. The Michigan Central Station development will go hand in hand with Ford's Dearborn Campus Transformation, a 10-year plan that began in 2016 with the goal of bringing key work groups closer together, and offering a more innovative and attractive place to work.

Detroit won't be confused with Silicon Valley anytime soon, but Ford is trying to offer tech workers an environment as appealing as the one they'll be leaving behind. If it helps convince some top talent to join Ford, it'll be a bigger win than investors ever would have guessed. To put it simply: Ford can't change the world with driverless vehicles if it doesn't lure some of the world's top talent, and it won't lure that talent without a one-of-a-kind workplace.

Dangling an IPO

General Motors talent strategy is a little different. In 2016, it acquired a start-up called Cruise Automation in a $1 billion deal, a price that initially had some investors wondering if GM had overpaid.

It didn't take long for most of those skeptics to recognize the acquisition had actually been brilliant. Fast-forward to May 2018 when SoftBank Vision Fund, known for taking stakes in important technology companies, agreed to invest $2.25 billion in GM Cruise, a move that immediately sent GM's stock jumping. That investment gave SoftBank a 19.6% share in the driverless car subsidiary and valued GM Cruise at a staggering $11.5 billion.

This does a couple of things for GM investors, starting with giving the company's autonomous vehicle ambitions a huge credibility boost. It also gives the subsidiary, which is still run much like a start-up, more capital, which it will need next year when it begins to deploy autonomous vehicles in its own ridesharing service.

Interior of Cruise autonomous vehicle with no steering wheel.

Interior of GM Cruise AV. Image source: General Motors.

Matters got more interesting when rumors surfaced that GM was in discussions about listing GM Cruise. If it sold a small portion of its subsidiary on the public markets, GM would be able unlock more value from it. Presumably, if GM Cruise traded separately, it would be able to bring in investors and capital at rates and valuations comparable to other tech companies, rather than vehicle manufacturing companies. But by holding onto a large majority stake, GM would retain control.

Now, if GM decides to pursue this partial listing, it could be the first step toward a full-fledged IPO for the subsidiary, and stock options combined with the possibilities of an IPO are a huge lure for potential employees. Don't expect GM to announce any decisions on the IPO front in the near term -- especially with GM Cruise's driverless ridesharing service due to launch in 2019 -- but do expect the possibility of one to tempt top-tier talent to consider Detroit rather than Silicon Valley.

It's likely that the first companies to develop successful and reliable driverless cars will enjoy a huge first-mover advantage. It's a race that pits Detroit automakers not only against their traditional rivals, but also against the world's most successful tech companies, to attract some of the brightest minds on the planet. Whether they're offering the chance to work from a transformative and innovative new campus, or the potential to be a part of a lucrative IPO, both Ford and GM recognize how important this battle will be, even if it's not an issue that shows up on any transcript, presentation, or SEC filing.