The Difference Between Ford and General Motors' Longterm Strategies

Matt Posky
by Matt Posky

While General Motors has become progressively more brazen in outlining its plans for the future, Ford has kept its cards a bit closer to the chest. We do know both companies have similar long-term goals, but Ford has been (rather wisely) preoccupied, adjusting its fleet to meet global demand and ensuring production flexibilities that should prevent it from being caught off guard by an industry turnaround.

It’s interesting because, a little over a year ago, former Ford CEO Mark Fields was promising a complete evolution of the automaker into something called “a mobility company.” However, it now looks as if GM is the firm making a beeline toward alternative revenue streams and a new business model, while Ford takes a more measured approach.

Some might argue that this comes down to Ford not having the edge in advanced technologies — and there’s some credence to that claim. But if you look at the interim period between today and the hypothetical future automakers love gushing about, Ford looks to be taking an intentionally measured approach. Whether it’s out of necessity or caution is another matter, though.

Both GM and Ford have been working on autonomous technologies and electrification for some time, with the former achieving more market success overall. Chevrolet’s Bolt has received high praise for being a desirable EV that’s easy to live with and Cadillac’s SuperCruise system is probably the closest thing any manufacturer has to autonomous driving right now — even though it isn’t.

However, Ford has placed a lot of focus on solving short-term problems before they evolve into something worse. The company plans to reallocate $7 billion from cars to SUVs and trucks in order to meet growing global demand. It also wants to cut $4 billion in engineering costs and $10 billion in material costs by 2022. All the while, the company has been very careful about keeping flexible platforms and global expansion in its periphery.

Meanwhile, Ford has also been working on all the same things GM has — you just hear about it less. Earlier this year, the automaker announced a substantial investment to build a new data center in Flat Rock, making it the second planned in Michigan. It also intends to have 90 percent of its global vehicles equipped with modem connectivity by 2020.

“Ford Smart Mobility and expanding into mobility services are significant growth opportunities,” Fields said at the time of the time of the announcement. “Our plan is to quickly become part of the growing transportation services market, which already accounts for $5.4 trillion in annual revenue.”

Of course, Fields wasn’t talking just about revenue sourced from ride-hailing, but the valuable data obtained by having customer cars perpetually connected to the internet — something GM has recently become very vocal about. But, even when we focus on the Ford’s planned ride-sharing services, it again seems like the cautious equivalent of what GM has in mind.

GM plans to use the Bolt as its go-to platform for autonomous vehicles in the near future. However, Ford doesn’t think going strictly electric is a shrewd move. Its strategy involves developing a new purpose-built hybrid for autonomous fleets, rather than retrofitting an existing model with the necessary hardware.

The downside is that the decision places Ford’s autonomous rollout a few years behind GM’s. But the automaker doesn’t see it as a loss. Jim Farley, Ford’s president of global markets, told Automotive News that a hybrid vehicle developed specifically for autonomous tech will be more capable overall. The Blue Oval is also one automaker that has relentlessly researched how the public reacts to autonomous vehicles.

“Others have made a big deal about verifying the technology; we think that’s table stakes,” Farley explalined. “We think what’s important is to verify the business model. The most important thing is that we execute well. We don’t want to get ahead of our skis.”

That’s a good way to sum up the difference between Ford and General Motors. The former is clearly taking a measured approach to most new technologies by ensuring it’s working on something without diving in head first. But it has suffered while GM gains positive attention from investors from what looks like a winning strategy. Then again, this could be a tortoise-and-hare scenario where GM finds itself confronted with problems Ford has already had time to troubleshoot.

Farley thinks powertrains could be one of those rough spots. “Anytime you’re not carrying goods and people, you’re losing money,” he said. “The most important thing is uptime and profitability. What we see is the [hybrid] is a much better cost-of-ownership model.”

The company expects its autonomous vehicles will be on the road for around 20 hours a day. Farley doesn’t believe battery-electric vehicles make good business sense because they would need to recharge multiple times a day, creating lengthy stretches of downtime and cutting into profits.

Ford is also looking at multiple ways to use autonomous tech, while GM focuses largely on nabbing fares. “We have to have a more diverse revenue model than ride-hailing,” Farley said. “I think in this world, you can hear all sorts of examples of getting out there and building a platform, but the business model — how this all comes together — is very important for us,” he continued. “We want to be production-ready, commercial-ready from day one.”

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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2 of 33 comments
  • Stuki Stuki on Dec 11, 2017

    As a general rule, in competitive environments, those with something useful to say, shut up. Leaving the open mic to the charlatans. Those who can, do. Those who can't, talk about doing.

  • Turf3 Turf3 on Dec 12, 2017

    Isn't GM's real strategy to sell lots of blingy Buicks to the Chinese nouveau riche and put the bare minimum into everything else?

  • NJRide So this is an average age of car to be junked now and of course this is a lower end (and now semi-orphaned) product. But street examples seem to still be worth 2500? So are cars getting junked only coming in because of a traumatic repair? If not it seems a lot of cars being junked that would still possibly worth more than scrap.Also Murilee I remember your Taurus article way back what is the king of the junkyard in 2024?
  • AMcA I applaud Toyota for getting away from the TRD performance name. TuRD. This is another great example of "if they'd just thought to preview the name with a 13 year old boy."
  • Jeff Does this really surprise anyone? How about the shoes and the clothes you wear. Anything you can think of that is either directly made in China or has components made in China likely has some slave labor involved. The very smart phone, tablet, and laptop you are using probably has some component in it that is either mined or made by slave labor. Not endorsing slave labor just trying to be real.
  • Jeff Self-driving is still a far ways from being perfected. I would say at the present time if my car took over if I had a bad day I would have a much worse day. Would be better to get an Uber
  • 2manyvettes Time for me to take my 79 Corvette coupe out of the garage and drive if to foil the forces of evil. As long as I can get the 8 track player working...