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Howes: Ford CEO spies threat, opportunity in tech boom

Daniel Howes
The Detroit News

At his first town hall meeting as Ford Motor Co.'s CEO, Alan Mulally said corporate strategy would be devised by the people running the Blue Oval business — not, he implied, by a policy shop paid big money to think big thoughts.

His successor, Mark Fields, has a different take for a different time. Unlike the existential threat that Mulally inherited in 2006, the profitable company Fields leads now faces competitive threats posed by technology-fueled change, the innovation it drives and how it promises to reshape consumer behavior.

In a series of high-profile moves, Fields is doing something his predecessor seldom did during the epic turnaround of Ford: recruiting high-level outside talent to help operating executives navigate competitive threats and identify opportunities for the Dearborn automaker.

John Casesa, the veteran Wall Street auto analyst and investment banker, will become group vice president for global strategy on March 1. He's the second ranking outsider in almost as many months to take a new, high-profile role at Ford, signaling that Fields is as serious about Ford's strategic position in a techno-paced world as he is engineering, building and selling cars and trucks.

Paul Ballew, a one-time sales guru for General Motors Corp. who did turns at the Federal Reserve and Nationwide Insurance, started last month as chief data and analytics officer "to help better understand consumer behavior and help speed development of the mobility, connectivity and autonomous driving innovations ...," the company said.

It's early — for Fields' run as CEO and for the tenure of his outside hires, one of whom has yet to report for work. But the fact that Fields considers their functions necessary to charting Ford's next chapter says as much about the new boss as it does the rapidly occurring change at the nexus of high technology, the global auto industry and the customers they chase.

First, it says Ford's leadership understands it doesn't have all the answers. An eight-year turnaround odyssey, punctuated by the global financial meltdown and the bankruptcy of two Detroit rivals, successfully restructured the business, improved the product portfolio and burnished the Blue Oval.

It also bolstered Ford's techno-cred, becoming a star attraction at the bellwether Consumer Electronics Show. The company partnered with Microsoft on its occasionally buggy MyFord Touch infotainment systems. And Ford plays in the hybrid vehicle space because, well, it has to — just like everyone else.

Second, Fields' moves are implicit recognition that technologically driven change is bearing down on the global auto industry and its customers, and Ford does not intend to be left behind. The winners in the next round will be the automakers whose leaders can anticipate change wrought by disruptive technologies and can act quickly enough to gain early-mover advantage.

The tech and auto spaces are melding inexorably into one another — from product development and infotainment to customization and advanced powertrains. Profit margins, price/earnings ratios, share price and brand halos? Not so much.

Third, as much as the global auto industry's expected arc of growth is likely to be a boon to the bottom lines of Ford, GM and other multinational rivals, a new cohort of competition is building in Silicon Valley. Google Inc., Apple Co. and others have the cash, the market performance and the moxie to challenge a century-old industry that is a cornerstone of the industrialized world, here and abroad.

Their products and Internet-powered tools, search engines and start-ups threaten to displace (where they haven't already) the young adult yearning to drive and own a car. Who needs wheels when you can go anywhere, say anything and see most things with an iPhone connected to Wi-Fi?

There is no guarantee either tech giant will make direct, wheels-on-the-ground automotive challenges to Ford and its rivals. They need not court the aggravation to still make a profound impact on the auto industry. The likes of Google and Apple, and others, represent a techno tsunami that is reshaping how individuals and businesses manage mobility and the new technologies driving it.

Apple is said to be exploring an electric car. Smartphone apps from Uber and others are challenging big-city cab service. An electric-car maker like Elon Musk's Tesla is challenging the status quo for selling cars and trucks, namely the dealer franchise laws fashioned by state legislatures to protect existing dealers and their automakers from upstart competition.

Fields' move, coupled with Ford's expansion of its Research and Innovation Center Palo Alto, is de facto recognition that Silicon Valley's threat to the auto industry as we know it is multi-faceted — ideas, innovation, flexibility, business practices, mountains of cash and a culture that considers risk and failure to be gateways to success.

The first step toward neutralizing a threat is recognizing it exists. Fields gets it; the challenge is transforming the vision into reality.

(313) 222-2106

Daniel Howes' column runs Tuesdays, Thursdays and Fridays and can be found at