There is a certain irony in the fact that when Ford's Executive Chairman said last week that the automotive future is 'electric and autonomous', it was in the same month that the company announced a stop to building electric versions of its Focus in Europe, writes Brian Byrne. Because they aren’t selling in a still diesel-centric continent.
But William Clay Ford Jr is likely to be right. He is forward looking, and presides over a company which has won its way through 114 years of many changes since his great-grandfather set up his Ford Motor Company in the adopted home of his own Irish emigrant parents, Michigan USA.
"To me, what a company is all about is not about the things you make," he told an audience of students, employees, and journalists at University College Cork. "It's not about the money you make. Yes, you do need to make money, and you do make things if you are a manufacturing company, but what I think makes a company enduring and relevant is that it touches people's lives in a positive way. That you do it around the world, and you can do it consistently."
He believes the role of carmakers like Ford is going to change dramatically, mostly driven by technological advances such as self-driving cars, and also by changes in the concept of ownership of cars. Artificial Intelligence will drive not only vehicles, but also the companies making them, and how they interact with customers. "That is going to be a core competence of a company that wants to remain relevant."
However, against all that change, the company must not lose sight of what he considers the most important thing, that 'the mission is to make people's lives better'. “Companies that can do it well are the ones that will be relevant for the next hundred years."
In car manufacturing, they might not all be the same ones we know today. The Ford boss referenced companies like Google and Apple 'now in our space'. Noting that in the embryo automotive industry, when 'anybody could try anything', nobody knew who the winners would be, he suggested it will be another decade before it is known who will be winning from the current mix of developing technologies and transportation solutions.
"I love where we are. It couldn't be more fun, more interesting. It is a high wire act without a net, but on the other hand it is generating such creativity and such energy that I love it. To me it is the most extraordinary time in my career."
|Bill Ford with former CNN correspondent |
Gina London in UCC.
Such issues will require a lot of discussion, and Bill Ford believes that it will have to start in the universities, for them to lead the way because an individual car-making company can’t make such decisions. “Imagine if Ford made one decision, and a company like Toyota made a different one for their cars ... it would be a nightmare."
Ford Motor Company set up a business unit called 'City as Customer', and visited cities around the world asking 'what would make your lives easier from a transportation point of view?'. One of the common answers was 'get vehicles off the road'. Ford is addressing this in a number of ways, including a pilot scheme in Austin, Texas, with 14-seater Transit shuttles in a service called 'Chariot', which uses a 'crowd-sourcing’ technology to move numbers of people from point to point depending on demand. "It costs a lot less than Uber — unlike some of the ride-hailing companies, it actually picks up more people because you're aggregating 14 people in the vehicle."
Autonomous vehicles will be a key part of this particular transportation future. And a key incentive for its development will be better access to jobs. "Increasingly in cities, the jobs are not where people are living. So if somebody doesn't own a car, or the transport system doesn't go from where they are to the job, there’s a problem. But in the system I'm describing, that problem should disappear. Roads will be more free, there will be more options to get you there, and we will have accomplished part of the goal to make people's lives better."
Those jobs are also going to be different. Technologies like 3D printing are already changing how things are made. Robots have already taken over difficult jobs on assembly lines, and computers handle their management. IT and software skills are going to be more relevant for employment than hardware. "There is a demand all around the world for people with these skills, and education will have to change to meet that demand. It's not just Ford that will be changing, it is every company out there. Some of them don't know it yet, but those that don't get it are really going to be left behind."
How vehicles are powered is also changing. Even five years ago, bio-fuels such as ethanol produced from crops was very topical, but that has already gone by the wayside because of various issues. Hydrogen as a fuel remains interesting, especially in fuel-cell use, but has stubborn problems including the fact that it is still petro-chemically derived. Fuel-cells are also difficult and expensive to manufacture. "As we sit here today, electrification probably makes a great deal of sense, though there is still the question of how do we get that electric power? Still, electrification is coming, and autonomous vehicles are coming — not always in sync — and we are investing heavily in both."
In trying to predict the future, Ford Motor Company has a division working on just that. But according to Bill Ford, the real need is for every employee, at all levels, to be thinking about the future and coming up with ideas. Ideas for change, and for coping with change. "In Ford we have an amazing history and an iconic founder, so the default is always to look back. It is also particularly hard to change when things are going well, like now when we have all-time record earnings. But I think this is exactly when we should be changing, when we have the resources now to invest in change.
"In another hundred years, I'd like people to be talking again about how Ford will change in the next hundred. But if we don't get this right, it’s not certain that chance will happen. If you really have people believing that what they are working on is actually going to make society better, that's a very powerful thing.
"Every generation has to reinterpret values for the time they are in, and these will be different things. But the core shouldn't change — caring about each other, caring about the communities in which we operate, in actually trying to improve people's lives. Those things are pretty timeless. Our employees do believe in those things, and seeing the challenges in those terms, then they will grab them."