In the race for driverless vehicles, auto and tech worlds collide

Google had all of Silicon Valley to choose from when deciding on a leader for its ambitious self-driving-car division. Instead, the tech behemoth hired an auto industry lifer: John Krafcik, a former head of Hyundai's American brand who got his start as an engineer working on the Ford Explorer.

The announcement on Monday came a week after Toyota said that it, too, had looked outside its industry for its next big name. This month, the carmaker said it had tapped the military's chief robotics engineer, Gill Pratt, to lead a $50 million push into not just driverless cars but also artificial intelligence, through investments into tech research labs.

The high-profile hires spotlight the growing overlap between the global giants of autos and tech, and analysts say it could point to a growing tension between some of the industries' biggest, wealthiest names.

Tech giants increasingly see ways to make money and save lives in the old-fashioned, hyper-profitable business of cars. But traditional automakers, who could lose heavily if self-driving cars go mainstream, aren't hesitating to grab onto some of tech's top minds, either, as a way to adapt in a world beyond cars.

"Any major company in any major industry has to act and think like a technology company now, and that's been a challenge for companies that come from the legacy world," said Colin Sebastian, a senior research analyst with Robert W. Baird & Co.

As for Google's auto industry hire? "His role might primarily be around developing the relationships" with automakers, Sebastian said. "It doesn't hurt to have someone in the family who comes from that world."

Krafcik, who will become chief executive of Google's driverless development push later this month, said on Twitter that the job is "a great opportunity to help Google develop the enormous potential of self-driving cars."

"Self-driving cars could save 1000s of lives, give people greater mobility & free us from things we find frustrating about driving today," he tweeted. "I can't wait to get started."

The hire comes a month after Google announced a radically different corporate structure with a new parent company, Alphabet, that would make it easier for such projects as the self-driving car to operate independently of the search giant.

For now, the program runs under the company's quasi-secretive skunk works, Google X, although some analysts expect Krafcik's hire could portend Google spinning the business off on its own.

Google is already running dozens of Lexus SUVs and experimental, pedal-free bubble cars on public roads, and after years of research, the vehicles are now covering about 10,000 miles a week on the streets of Austin and near Google's California headquarters, in Mountain View.

The company has said repeatedly in recent months that it has no intention to get into the business of making cars. To build its prototypes, however, Google has had to work with parts suppliers such as Bosch and Continental, and as its technology develops, the company could need to craft even more deals with carmakers.

"John's combination of technical expertise and auto industry experience will be particularly valuable as we collaborate with many different partners to achieve our goal of transforming mobility for millions of people," Google said in a statement. "This is about getting ourselves ready for the future, so we can bring this technology to its full potential."

And Google is not alone in looking for talent in the auto world. Apple, which is widely rumored to be working on a car, this summer hired a longtime auto industry veteran, Doug Betts, who had recently left his job as head of quality at Chrysler Group.

Krafcik was credited with boosting Hyundai's U.S. arm during his reign between 2008 to 2013, leading the once-floundering South Korean automaker as it unveiled fast-selling models that helped it compete with rivals including Kia and Toyota. During the recession, he also helped pioneer a widely celebrated marketing measure that allowed buyers to return their cars if they lost their job.

Krafcik spent years at Ford Motor, including as a chief engineer and product development executive, and last year became president of TrueCar, an auto-pricing analysis site.

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