Wind River deal gives Aptiv a big pool of tech talent

By purchasing software firm Wind River for $4.3 billion in cash, supplier Aptiv is not only gaining technology it will need as vehicles become more software-driven. It will also be adding a staff that includes more than 1,000 technical employees at a time when software developers, engineers, data analysts and other high-skilled workers have never been more in demand in the auto industry.

"You have to be really careful as a company that you have the right people to analyze that data and manage it because there is going to be a lot of junk data out there," said Carla Bailo, CEO of the Center for Automotive Research in Ann Arbor, Mich. "That piece of human capital is vital, and if you don't have it, you'd better start partnering with those that do. I think that's exactly what Aptiv is doing with Wind River."

The Aptiv-Wind River deal comes as automakers, suppliers and tech companies spend billions of dollars to create new vehicle software capabilities, enabling more over-the-air updates that the industry hopes will provide consumers with desirable features and boost service revenue.

Wind River, formed in 1983 and most recently owned by private equity group TPG Capital, develops software and cloud systems for several industries, including automotive, aerospace, defense and telecommunications. Aptiv hopes Wind River's expertise across those industries will help its pursuit of new business for its automotive software stack.

"We think some of the big answers to some of the big questions that are being faced by automotive in how to deploy software effectively across the fleets is actually going to come from other industries," Aptiv CFO Joe Massaro said on a call with analysts this week. "Wind River has a lot of that know-how and a lot of that understanding."

The Aptiv-Wind River acquisition is one of several deals in recent months that were made in part to bolster established auto companies' technical staff and capabilities.

This week, Canadian diversified supplier Magna International Inc. said it struck a deal with Boston self-driving shuttle company Optimus Ride to hire more than 120 of its engineers, as well as to obtain its autonomous vehicle technology and intellectual property.

In a statement, Magna Electronics President John O'Hara said the new engineers would help Magna speed up its plans in a "rapidly growing" market for advanced driver-assistance technology.

"As advancements in autonomy continue, we saw an opportunity to bring in additional expertise to support current programs as well as future customer needs," he said.

Likewise, Toyota's Woven Planet automated-driving subsidiary last year bought ride-hailing company Lyft's self-driving car unit, Level 5, for $550 million. By doing so, Woven Planet immediately picked up 300 highly skilled employees to strengthen its pool of software experts, Automotive News previously reported.

It was a move that Toyota said was driven in large part by a desire to add as many talented staffers to its team as quickly as possible.

"We need great people and world-class employees at scale in order to have the impact we're hoping for," Woven Planet CEO James Kuffner told Automotive News at the time.

CAR's Bailo said established automotive organizations are likely to continue acquiring companies as a means of boosting their skilled staff head counts quickly. Those new employees can bring valuable expertise and help decades-old companies see things in a new light as they invest in the latest technologies, she said.

"You have people coming in who think differently, behave differently and have done things on a different timetable than you're used to and can challenge things," she said.

The Aptiv-Wind River deal is expected to close in mid-2022.

Hans Greimel and Reuters contributed to this report