Ford is reinventing itself in Silicon Valley. In doing so, the automobile manufacturer is going with the trend in the automotive industry.
When Jim Hackett, who has been CEO at Ford since mid-2017, started speaking at the beginning of the 2018 Consumer Electronics Show (CES), the 62-year-old manager didn’t sound like the boss of the world’s third-largest car manufacturer, which sold more than six million units in 2017. He spoke of individual mobility as an “old system that is failing”, of a “model of the past that is no longer sustainable”, and of roads that were meeting places and playgrounds for children before the automobile took them over. “Over the years, parks and public spaces have been sacrificed to build parking lots and highways.”
Hackett’s statements illustrate the fact that the automotive industry is currently undergoing the greatest transition in its history. Along with alternative drives, bits and bytes are becoming increasingly important, with new technologies completely changing transportation systems. “Parking, traffic flow, and the delivery of goods can be radically improved” says Hackett – with the help of artificial intelligence, networked and automated vehicles, and mobility solutions based on collective use.
Wanted: Access to Silicon Valley
Many automobile manufacturers are trying to make this transformation a success. All of them share the challenge of finding specialists who can not only form metal sheets and develop engines, but also give cars the intelligence necessary to connect with other vehicles and the infrastructure. One of their most important development goals is to enable vehicles to travel without human drivers. This is not only because it increases transportation efficiency, but also because it makes traffic safer. The reason: Most accidents today are caused by human error. Automation can change this because machines do not get tired and cannot be distracted.
Many automotive companies are looking to connect with Silicon Valley to develop digital technologies and be close to companies such as Google, Apple, Intel, and Cisco. Here they can have their finger on the pulse of the latest trends and can take advantage of opportunities as they arise. For example, the Stuttgart-based automotive supplier Bosch bought the startup Seeo, which develops batteries. It is well known that this supplier also furnished components for the Google car.
In 2015, Ford opened its Research and Innovation Center (RIC) in Palo Alto. This is now one of the largest in the valley. 160 researchers, engineers, and scientists work there. RIC director Dave Kaminski emphasizes the importance of its cooperation with the dozens of startups and the five elite universities in the neighborhood, including Berkeley and Stanford. RIC recruits young programmers, IT specialists, and unconventional thinkers from the area. Right from the start, around 80% of the team members came from the booming technology sector. Mercedes and BMW are also present in Silicon Valley.
Researching self-driving cars with startups
The primary development objective of the industry is the self-driving car. A cooperative agreement between Ford and the startup Autonomic was announced in the autumn of 2017. The two companies plan to develop a traffic app that will make fully automated driverless vehicles available to users. After all, putting together a self-driving car without pedals and a steering wheel is one thing, but getting it to go where you want is another. Ford is planning robot taxis for ride-hailing to get individuals from A to B, and for ride-sharing when people decide to carpool. The San Francisco-based ride-sharing company Lyft is on board.
More than ten years ago, Ford invested in Velodyne, a developer of lidar sensors, which enable vehicles to precisely perceive their surroundings. The company also invested in the field of artificial intelligence (AI) as well as in high-resolution 3D mapping technology, which is a basic requirement for fully automatic cars. In 2017, the company joined Argo AI, a startup founded by former Google and Uber managers.
Ford wants to assume the lead role
Ford currently operates one of the largest fleets of experimental manufacturer-owned autonomous vehicles, which the company is permitted to test in California, Arizona, and Michigan, where there is a large automotive supply industry. If everything goes according to plan, the first series product will be a car without pedals or a steering wheel: a robot taxi.
But there is another obstacle that has to be overcome, one that all managers know all too well. Governments around the world are clearing the way for automated driving, says Jim Hackett. However, this is happening too slowly in light of the ever-increasing pace of technological progress. Yet this does not diminish his confidence: Ford is considering licensing its technology to other market players as soon as it is ready for the market. The fact that Jim Hackett was head of Palo Alto’s Research and Innovation Center before becoming CEO seems to be giving Ford’s investment in the future an extra boost.