SAN FRANCISCO – Silicon Valley’s delight in challenging convention and calculated risk-taking has inspired the leaders of both the Ford Motor Co. and the state of Michigan, Bill Ford and Gov. Rick Snyder told USA TODAY Thursday.
“I just spent 10 years on the eBay board, and what I love out here is how people like to challenge accepted wisdom,” Ford said in an interview after a one-hour public talk with Snyder at the Commonwealth Club, part of an on-going state promotional push sponsored by Business Leaders for Michigan.
Ford, the automaker’s executive chairman, specifically cited the long-held assumption that no new automakers would emerge on the global scene given the high barrier for entry in that complex business.
“Tesla said, ‘No, we think we can do this.’ I love that about the Valley, this notion that anything’s possible and nothing is too hard,” he said. “That spirit is what we need now to drive our organization.”
Snyder, the state’s two-term Republican governor, added that Michigan’s automotive industry was for decades considered “the entrepreneurial and innovation capital of the world, but we became risk averse because we wanted to keep a good thing going,” which ultimately led to General Motors filing for Chapter 11 in 2009 and Detroit going bankrupt in 2013.
“Silicon Valley embraces risk management,” said the two-term Republican governor. “I’ve told my team, if everything I propose works, we haven’t been pushing hard enough.”
The governor’s team handed out fliers titled “Take a look at Michigan’s turnaround,” which cited statistics such as “Michigan’s corporate tax climate has risen to 10th best from the 49th worst,” and “Michigan ranks #1 in new manufacturing jobs since 2009, adding 132,000 jobs statewide.”
Snyder is a former Gateway computers exec turned venture capitalist who ran on the platform “One tough nerd.” Ford is the great-grandson of Henry Ford, who in recent years has challenged his top executives to remake the storied automaker from a purveyor of personal vehicles to a mobility company. Earlier this year, the automaker vastly expanded its Silicon Valley research and development facility with an aim to grow its staff of engineers to around 200 by the end of 2015.
FUTURE FORD WILL ‘LOOK DIFFERENT’
“We’ll always be called Ford Motor Company, but what we do and how it looks may look different, we could be a provider of transportation as a service,” said Ford.
“We need to figure out in this new world, what do we need to own, who do we partner with, what do we not touch, and how do we add value to our shareholders with a business model that may look quite different,” Ford said. “We may be less asset intensive, and hopefully higher margin. There’s a real opportunity in this for us. But in 30 to 40 years, heck in 10 to 20, we won’t look a lot like we look today.”
On Tuesday, Sergey Brin presented Google’s prototype self-driving car to a group of journalists, and pointedly said the search company would be looking to an established automaker to build the vehicle. Is Ford interested?
“We’re always interested,” Ford said with a smile.
“Everything we’re now talking about requires partnerships. Go back to my great-grandfather, and we had our iron ore travel on boats to the factory and 72 hours later a car would come out. Incredibly vertical business. What we’re doing now will require partnerships with tech companies, startups, government, everyone.”
In most discussions about the automotive landscape of the near future, analysts and auto executives tend to agree the world will see a gradual shift mainly in cities from individual vehicle ownership to shared ownership and eventually to taxi-like services involving automated cars.
Snyder said government’s role in ushering in this new era of mobility is critical.
“Tech won’t be the holdout, these (cars) will exist, so it’s just a matter of the regulatory, legal and insurance environment. Also, how do we get a common global standard? For any company, if there are different standards that’s hard.”
Ford jumped in. “Yes, if Ford can only talk to Fords, that’s not going to work.”
ONE TICKET TO RIDE
In fact, Ford predicts that the city of the future will look a quiltwork of mobility options all tethered to the smartphone.
“Rural car ownership will look similar to today for a while, but urban will be different,” he said. “I think everything will be on single network. Private cars, taxis, buses, pedestrains, Segways, whatever. And you will be on your phone saying I’m here, and I want to get to a soccer stadium, and based on the cheapest or most direct way you will use a single ticket to get there. Everything will be talking to each other.”
Technology’s ability to transform many aspects of our lives isn’t up for debate, but in some cases lost jobs may be the result of such streamlining. Uber CEO Travis Kalanick has made no secret of his ride-hailing company’s interest in accelerating its self-driving car efforts, which would render human chauffeurs pointless.
Snyder said “we need to understand the challenge that some jobs will disappear but make sure people are being trained for the next job that will be created in this change. There are good job for people today, but they often require retraining and different skill sets. We al need to be looking farther ahead.”
Ford touted the 20,000 jobs his company has added in Michigan since 2011, and added that the state could have a bright future as a center of American manufacturing in the new tech era.
“Many of these tech companies don’t actually make things in many cases, and one of the things we do well in Michigan is we make things,” he said. “The skills required may change, but that sector of economy is as important today as it was 50 years ago.”
During the Commonwealth Club session, which was moderated by Greg Dalton, founder of the club’s Climate One environment-focused series, Ford was asked a few lightning round questions in the manner of TV game shows.
Asked if Tesla made sexy cars, Ford boomed “Yes!”
Asked if his children would be interested in buying an Apple car, should the rumors about the Cupertino, Calif. company getting into the auto game prove true, he said no with a frown.
“Would you disown them if they did?” asked Dalton playfully.
Ford to big laughs: “Yes!”
Follow USA TODAY technology reporter Marco della Cava on Twitter @marcodellacava.
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