At a time when car sales are falling, the profitability of car manufacturing is dwindling and companies such as Google and Tesla are pioneering new concepts of mobility that are bound to change the way we get around over the next decade, there is no time for the big automotive OEMs to rest on their laurels. While Ford recognized these trends and started its transformation into a “mobility” company under the leadership of former CEO Mark Fields, it has been relatively slow to adjust compared to its peers. When Tesla’s market capitalization exceeded Ford’s for the first time ever early April, the market underlined the importance of staying on top of innovation when operating in an industry in flux.
With these recent events in mind, this week’s appointment of the head of Ford’s Smart Mobility subsidiary Jim Hackett as the group’s new CEO sends a clear message to the market that the future direction of the company will be driven by technological innovation. Operating from its own base in Palo-Alto – rather than from Ford HQ in Detroit – in order to be more nimble and avoid being held back by the bureaucracy of the giant parent company, Ford Smart Mobility was established in 2016 to take the company’s connected vehicle, autonomous driving and mobility activities to the next level and bridge the gap with the competition. In September, it acquired San Francisco based ride-sharing company Chariot, which provides commuter shuttles in the San Francisco area that serve routes based on crowdsourced data.
Although Jim Hackett has only been with Ford since the launch of Ford Smart Mobility, he is no stranger to turning around firms in adverse industries. Having headed Michigan based furniture company Steelcase for almost 20 years before joining Ford, he led the firm’s response when open-office environments started to gain prevalence at the expense of traditional cubicles.
The skill to bring about fundamental change will be critical for his success at Ford as the company develops its own innovative capabilities and digests recently made acquisitions such as Chariot and autonomous vehicle software developer Argo AI, which received a $1 billion investment from Ford last February. If Jim Hackett delivers on these projects, this would go a long way in terms of securing the firm’s long-term success and transforming Ford from a mobility company on paper into a driving force behind innovation in the automotive industry.