Bill Ford says automakers can’t rush robotic cars
Executive Chairman Bill Ford Jr. doesn’t want to say too much yet about the future, despite pressure from Wall Street. That could hurt Ford Motor Co. more than help it.
“There’s a very delicate balance between what you want to telegraph publicly, and I think in the past, we said too much,” Bill Ford said after a speech Tuesday at a Detroit Economic Club meeting. “You want to give Wall Street enough information, but you also don’t want to telegraph exactly where you’re going.”
That’s partly competitive strategy. The company doesn’t want to tip off crosstown rival General Motors Co. or others to where it’s headed with ventures in self-driving cars, electrification or more traditional segments of the company. Another factor: Ford leaders and others have said that they are figuring out exactly what the future will require.
The man with his name on the cars spoke Tuesday about changes ranging from autonomous vehicles to 3-D printing of parts, how Ford will address those changes, and how the company will add value in the future.
But as Wall Street analysts and experts increasingly call for bold moves to happen faster from the Detroit Three, Bill Ford is confident that everything about the industry is going to change, and that Jim Hackett — the CEO appointed by the Ford board of directors in May to lead the company through that change — is making the right moves at the right pace early on to deliver long-term value.
“All of the business models are going to be remade and rebuilt,” Bill Ford said. “If we do this right, we’ll be less cyclical, less capital intensive, higher margin, (and) much more sustainable.”
The comments come less than a week after Ford posted a $1.6-billion profit driven largely by North American truck sales, and some realignments and cuts under Hackett’s direction. Hackett and his team plan to lower operating costs by $14 billion over the next five years, which Bill Ford and other executives expect will help the Blue Oval prove its worth.
But Hackett has also let news on future plans trickle out during his first several months as CEO. Experts have said they need more information from Hackett, who was brought in partly to articulate a vision.
“It’s not like we’re not going to say anything,” Bill Ford said Tuesday. “It’s just that we’re not going to say everything. And I think that the key is providing clarity when we’re ready so that investors can make an informed decision.”
Ford and other legacy automakers have been criticized lately for failing to publicize clear visions for the future. Wall Street analysts in late October suggested both Ford and GM could increase value by bringing autonomous vehicles and technology to market sooner.
Adam Jonas, analyst with Morgan Stanley, wrote in a Tuesday note to investors that Ford could take 12 potential moves as it changes the business. One of those included deploying lower-level advanced driver-assistance systems in all of its vehicles as soon as possible. He also suggested those vehicles be “connected” cars, which means data can be collected from them.
“This may hurt margins in the short term, but can provide Ford with valuable data and help defend against the risk of obsolescence medium-term,” Jonas wrote.
That note was issued a day after Goldman Sachs analysts — downgrading GM from a “neutral” stock to a “sell” — wrote GM’s outlook would be more positive if it could bring an autonomous vehicle to market sooner than expected.
Bill Ford isn’t rushing the development there. The company will provide clarity for investors when it is ready, he said. The company’s financial fitness — and trucks and SUVs — will drive value in the short term.
“It’s not who’s going to be first, it’s who can translate whatever it is into a way people will value and feels like it’s personal to them,” he said Tuesday. “It’s who’s most thoughtful to market I believe will win. There are so many ways that tech can be deployed just for tech sake that leave people frustrated.
“It’s not all about a date. I think the biggest mistake we could all do is introduce technology that isn’t ready for prime time just to get it out there.”