In 2012, a small team of Google Inc engineers and business staffers met with several of the world's largest car makers, to discuss partnerships to build self-driving cars.
In one meeting, both sides were enthusiastic about the futuristic technology, yet it soon became clear that they would not be working together. The Internet search company and the automaker disagreed on almost every point, from car capabilities and time needed to get it to market to extent of collaboration.
It was as if the two were "talking a different language," recalls one person who was present.
As Google expands beyond Web search and seeks a foothold in the automotive market, the company's eagerness has begun to reek of arrogance to some in Detroit, who see danger as well as promise in Silicon Valley.
For now Google is moving forward on its own, building prototypes of fully autonomous vehicles that reject car makers' plans to gradually enhance existing cars with self-driving features. But Google's hopes of making autonomous cars a reality may eventually require working with Detroit, even the California company acknowledges. The alternative is to spend potentially billions of dollars to try to break into a century-old industry in which it has no experience.
"The auto companies are watching Google closely and trying to understand what its intentions and ambitions are," said one person familiar with the auto industry, who asked to remain anonymous because of sensitive business relationships.
"Automakers are not sure if Google is their friend or their enemy, but they have a sneaking suspicion that whatever Google's going to do is going to cause upheaval in the industry."
NO STEERING WHEEL
Analysts estimate Google has invested tens of millions of dollars in an effort that's ultimately a side project. But car companies, all too familiar with the devastating financial and brand damage of recalls, would see any hiccups with the self-driving car as a threat to their main business.
Nowhere is the disconnect more evident than in Google's latest prototype. Two people sit abreast in the tiny pod-shaped car, which has a flexible windshield for safety and is topped by a spinning cone that helps navigation. Video link: here
The electric vehicles, unveiled in May, are limited to a maximum speed of 25 miles per hour and do away with several decades-long constants in motoring: the steering wheel, brake pedal and accelerator pedal.
Google co-founder Sergey Brin has described self-driving cars as an on-demand service that consumers summon when needed. That would represent a seismic shift from a longstanding model based on individual ownership, an annual $375 billion U.S. market according to J.D. Power.
Moreover, a study by consulting firm KPMG last year found that American consumers would trust brands like Google and Apple more for self-driving cars than they would automakers.
General Motors' global product development chief Mark Reuss recently said Google could become a "very serious competitive threat."
EVOLUTION VERSUS REVOLUTION
Chris Urmson, director of Google's self-driving car group, would not discuss any negotiations with automakers but argues that self-driving cars will benefit car companies and consumers by expanding the number of car users.
"I'm confident that when there is technology that makes sense, and when there is a business model that makes sense, that there will be interest and partnerships" with car makers, Urmson told Reuters in an interview.
Self-driving cars can free people to do more of the things that earn Google money, such as Web search. But Urmson said Google is still figuring out how to make a profit from the technology.
"I would imagine that this is probably different than just making more time for people to click on web sites," he said.
Car makers such as GM, Mercedes and Volvo have been developing their own autonomous vehicle technology for years.
But most fav