Ford claims its new CEO has deep ties to Silicon Valley -- but the company still has a big self-driving-car problem

Jim Hackett FordFordJim Hackett, Ford’s new CEO.

Ford is showing it’s serious about self-driving tech by naming Jim Hackett its new CEO, but whether Hackett can compete in the multi-million talent war for AI experts remains to be seen.

Hackett has led Ford’s Smart Mobility unit since it was formed in March 2016. The division was created as part of Ford’s expansion into smart mobility services, which includes the development of autonomous vehicles and its car-sharing service GoDrive.

Ford is touting Hackett’s background and deep ties with Silicon Valley as an asset that will help the automaker advance in the fields of robotics and artificial intelligence.

Chairman Bill Ford said during a Monday press call that Hackett is held in high-esteem by Silicon Valley leaders, which he witnessed firsthand during a board trip out West last February.

“As you know the Silicon Valley culture is very, very different than industrial midwest… and to see Jim not only navigate that so well but to be held in such high regard there made an impression on me,” he said.

Hackett doesn’t have a tech background, but Ford is betting that his experience as Steelcase CEO and former athletic head for the University of Michigan will prove useful.

“Look for Ford to present itself as an AI Machine Learning Big Data Tech Firm,” Morgan Stanley auto and mobility analyst Adam Jonas wrote in a note. “During his stint heading the University of Michigan Athletic Department, Jim Hackett proved to be highly effective in bringing talent from Silicon Valley to Southeast Michigan (Jim Harbaugh).”

Although commendable, convincing former 49ers coach Harbaugh to leave the West Coast for his alma matter is a lot different than convincing AI experts to leave traditional tech companies for the auto industry, which is still new to this technical space.

“The traditional power and talent of the auto industry was based in their product development group,” Gary Silberg, the head of KPMG’s automotive unit, previously told Business Insider. “You can’t just turn on a dime and say, ‘OK, now we are going to go recruit AI geniuses and computer scientists and expect them to come to work with us.'”

Six technology companies employ 54% of all deep learning specialists: Google, Microsoft, NVIDIA, IBM, Intel, and Samsung, according to a 2016 report by accounting firm KPMG.

As CEO for furniture company Steelcase, Hackett helped transition the company from selling cubicles to designing furniture for an open office plan when the concept was still relatively new.

The automaker isn’t a stranger to recruiting from the outside to make radical changes, Jonas wrote in his note, adding that Alan Mulally came from Boeing before becoming Ford CEO in 2006.

But transitioning a company with roots in personal car ownership to entirely new mobility platforms is no easy feat

“In many ways, Mr. Hackett’s job may be more challenging than Mr. Mulally’s,” Jonas wrote.

Ford driverless carFordA self-driving Ford Fusion.

Under Hackett, Ford’s Smart Mobility has made relatively small gains.

It bought shuttle-van startup Chariot for $US65 million, which will eventually integrate with Ford’s bike-sharing service GoBike when it launches in 2018. The unit also bought Israeli company SAIPS to advance its machine learning algorithms for self-driving cars.

Under Fields, Ford invested $US1 billion in startup Argo AI as part of a talent grab for autonomous software experts.

But Ford’s acquisitions may not be enough to compete with the investments made by rivals General Motors and Fiat Chrysler:

  • GM has invested $US500 million in Lyft and acquired Cruise Automation, an autonomous driving startup founded by MIT engineers, for $US581 million.
  • Fiat Chrysler is supplying Waymo, the self-driving company born out of Google’s parent company, with over 500 Pacifica minivans for Waymo’s driverless test fleet and reportedly collaborating on a robot taxi service.

Hackett’s experience Silicon Valley may very well prove useful to creating new alliances that Ford needs to compete with the Big 3 and Tesla. It will simply depend on how deep those ties run.

Get the latest Ford stock price here.

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