Ford’s decision to push CEO Mark Fields out of the company has a lot to do with its stock price that has plummeted 40% during his three years of leadership.
But its decision to replace Fields with Jim Hackett, the exec who was overseeing Ford’s Smart Mobility unit that’s responsible for autonomous tech, shows Ford’s desire to shift its narrative as an automaker to a mobility company.
At a time when Tesla’s market value has risen dramatically to challenge both Ford and GM, Ford sees the benefit of of not only channeling more resources into electrification and autonomous tech, but of making a public display of its intention to do so.
We can expect this to play out in the form of a Silicon Valley shopping spree, where Ford will either look to acquire or invest in promising startups.
Ford has already shown it’s willing to spend the big bucks on its self-driving tech before Hackett took over as CEO. It has made over $US1 billion worth of investments in companies like Pivotal, Velodyne, and Argo AI as it looks to ramp up its autonomous driving efforts and bring on fresh talent.
Ford has said it plans to keep making those big investments as it places a greater focus on mobility.
“As we’ve shifted from being an automotive company to being automotive and mobility, we’ve seen an increasing need for tech talent,” Julie Lodge-Jarrett, Ford’s human resources director, told Business Insider in March.
“We look at how we traditionally buy talent and how we might buy it in greater quantities based on other companies or other resources,” she continued.
Ford realises it must invest heavily to acquire the software talent that is accustomed to working for tech companies in the Valley.
Automakers will continue to remain an inherent piece of the self-driving-car puzzle as vehicle manufacturers, which is a notoriously challenging business to break into as can be seen through Tesla’s production struggles alone.
But if carmakers wish to dive into the lucrative business of self-driving tech without having to split the profits with giants like Waymo, the self-driving company spun out of Google, they will need to spend more on talent.
Hackett has deep ties to Silicon Valley, Ford Chairman Bill Ford said on a press call with journalists Monday. In fact, he sold furniture to Apple’s Steve Jobs during his 20-year tenure as CEO of Steelcase, a furniture company, Bloomberg reported.
Hackett has also served as the head of University of Michigan’s athletic program and successfully recruited 49ers coach Jim Harbaugh to lead the university’s football program.
“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).”
Ford has already shown it’s serious about spending more on the future of mobility from electric cars to self-driving vehicles, but Hackett will look to use his Silicon Valley ties to ramp up those efforts at a greater pace.
“It’s our right to win here. We don’t have to cede that to anybody, Tesla, any of them,” Hackett said on the Monday press call. “It’s our right to win there, and so I love that challenge because I know how to do that.”
Get the latest Ford stock price here.
Business Insider Emails & Alerts
Site highlights each day to your inbox.