By on July 24, 2018

Ford Motor Company announced Tuesday that it has formed formed a subsidiary — Ford Autonomous Vehicles LLC — devoted entirely to autonomous vehicle development. That’s probably the catchiest name we’ve heard since Bank of America Corp or Waste Management Inc. However, you don’t need a clever moniker when you’re dumping $4 billion into a project, which Ford intends to do through 2023.

With all the current drama and distrust surrounding self-driving cars, we thought there was a chance automakers would cool off on pushing for it so aggressively. But while some OEMs curbed their futuristic rhetoric ever so slightly, practically everyone else kept the pedal to the metal — an analogy that will lose all meaning once computers drive us everywhere.

Let’s see what The Future™ looks like in and around Dearborn.

“Ford has made tremendous progress across the self driving value chain — from technology development to business model innovation to user experience,” said Ford CEO Jim Hackett in a statement. “Now is the right time to consolidate our autonomous driving platform into one team to best position the business for the opportunities ahead.”

Nobody could forget the industry staple that is “the self driving value chain.” Knowing that Ford has made progress with that is tantamount to a grand success already.

Alright, snide remarks on corporate jargon aside, the folks at the Blue Oval are investing a lot into self-driving vehicles. General Motors seems to be frontrunner, but Ford isn’t far behind. Both companies are investing heavily into the technology, convinced that it’s the best way to ensure long-term financial victory. Although the really big bucks seem to be tied into data sales, connectivity, and various subscriptions — all of which becomes more lucrative once cars can drive themselves.

The second you’re not preoccupied with driving your own vehicle, you’ll likely use its multimedia system to surf the web, make online purchases, or take in a movie. Automakers can charge for all of these things while selling your personal data to the companies they’ve partnered with, who will then advertise to you in-car. But that’s just part of a grander whole. Last year, a report from Intel estimated that self-driving vehicles will usher in a new “passenger economy” worth $7 trillion by 2050.

Autonomous vehicles are also supposed to save countless lives (when operating correctly) and reduce commuting times (once the vast majority of vehicles are no longer human operated). But those are just selling points. The real incentive is all the cash just waiting to be grabbed by whichever companies get there first.

It all sounds very boring, greedy, and somewhat improbable. But, with enough money, just about anything is possible. How else do you think we got to the moon?

Ford is spending roughly $4 billion to plant its self-driving money tree. The first billion has already been committed as part of the company’s investment into Argo AI, a Pittsburgh startup that has become its chief partner in autonomous development.

Ford Autonomous Vehicles LLC will be primarily based at Ford’s Corktown campus in Detroit and will hold Ford’s ownership stake in Argo AI. It will also include Ford’s self-driving systems integration, autonomous vehicle research and advanced engineering, AV transportation-as-a-service network development, user experience, business strategy and business development teams.

The company claims the subsidiary is “structured to take on third party investment.” Sherif Marakby, current Ford vice president and formerly Uber’s autonomous vehicle program director, will be appointed as CEO of Ford Autonomous Vehicles — reporting to a board of directors chaired by Marcy Klevorn, Ford’s executive vice president and president of Mobility.

Meanwhile, Ford is reorganizing its Global Operations division (led by Executive Vice President Joe Hinrichs) to include Information Technology, as well as the company’s global order-to-delivery system, technologies, and processes from across Ford’s production system.

“The evolution of computing power and IT have helped bring great products to customers — from cars to tablets,” Hackett said. “We can now harness this technology to unlock a new world of vehicle personalization, supply chain choreography and inventory leanness that rivals any industrial model in the world — and Joe’s challenge is to help us redesign this system to do just that — while better serving customers and dealers and improving our overall fitness.”

[Images: Ford]

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35 Comments on “Ford Commits $4 Billion to the Future, Creates New AV Subsidiary...”


  • avatar
    DeadWeight

    HACKett is an imbecile and is going to absolutely devastate Ford.

    I cannot believe that the Ford Family is supporting this disaster, and ultimately, when funny fiat digital 1s and 0s shrink, and the real market and price discovery re-emerge, it will be too late to undo HACKett’s wake of destruction.

    • 0 avatar
      Trucky McTruckface

      “HACKett” is merely Bill Ford’s minion. And Bill’s an environmentalist nut, a true believer in a “sustainable” future where private automobile ownership is a thing of the past, short-term costs be damned.

      Hackett was brought in to run Billy-Boy’s silly mobility division. After Field’s was canned for not delivering sufficient shareholder value, do you really think Hackett would be allowed to pursue such nonsense if the Fords weren’t fully behind it?

  • avatar
    Sub-600

    Ford cannot suck enough. Good grief.

    • 0 avatar
      JohnTaurus

      Not quite as much as your trolling.

      Don’t forget to tell your mentor below that the login issues are only affecting me, and its all due to my slow internet connection, which of course makes as much sense as your constant criticisms of anything related to Ford (0). But, hey, facts don’t matter when you’re trolling hard, eh?

      • 0 avatar
        brn

        JT, I had the same problem. Blew away my cookies, never checked the “remember me” box again, and things are better. Sure, I need to login at each session, but that’s so much better than logging in multiple times per post.

    • 0 avatar

      The stock market may agree with you. Today Fords stock is 10.57usd, which is nearly a quarter of GMs stock. What else can you say about a company that cancels the competitive Fusion and wants people instead to buy a poor vehicle like the EcoSport. The EcoSport is ranked at the back of the pack in nearly every comparison test I have seen.

      In stating that Fords “sucks” you maybe actually making a factual statement.

  • avatar
    mmreeses

    my pint of beer prediction is by the time all the kinks of AV tech are ironed out, the most important patents will be in the public domain.

    Just like automobiles were 100 years ago. Not an insane strategy for a carmaker to just wait until someone else figures it out. And then buy the tech, like OEMs buy car seats.

  • avatar
    DeadWeight

    TTAC – FIX YOUR PHUKKING WEBSITE – IT’S ONLY BEEN FUBAR FOR OVER A WEEK NOW!

  • avatar
    Kendahl

    “But, with enough money, just about anything is possible. How else do you think we got to the moon?”

    NASA’s budget peaked at 4.4% of the federal budget in 1966. That was $6 billion 1966 dollars which would be $45 billion today.

  • avatar

    While Ford wastes an inordinate sum of money on this frivolous technology other carmakers will be working on improving their car and truck lines. Nobody asked for this technology, but Ford thinks it is imperative. Hackett due to his lack of experience in industry is taking a almost child-like view of the autonomous vehicles. It is nice to have exuberance for this technology, but it is mainly a pipe dream. Ten years from now their will be few in any autonomous vehicles on the road.

  • avatar
    SCE to AUX

    These AV companies fail to understand that Americans want autonomy for themselves, not for their cars. It’s a huge disconnect from the American cultural mindset.

    We’ve talked about how CAFE regs are diverging from market taste (something Trump is ham-handedly trying to fix), but this AV craze among mfrs is the same thing. Americans are all about convenience, but not loss of control.

    Frankly, very few people care about the promise of a safer future wrought by self-driving cars, because a) they don’t believe it, or b) safety is something “I” control. Accidents happen to other people. This is why the Toyota throttle issue never gained traction in the public mind.

    Well, Ford should also invest $4 billion in a rainy day liability fund, so they can pay out for loss claims when their Level 4 or 5 cars hurt somebody.

    • 0 avatar
      Kendahl

      In my opinion, Americans are more receptive to AVs than you believe. For most people, automobiles are a combination of transportation and fashion statement. If they cared about driving, they would select vehicles that are more driver oriented than pickups and SUVs and wouldn’t be talking or texting as they drive. As long as AVs work (and that has yet to be shown), they provide the flexibility of privately owned vehicles while requiring no more user involvement than mass transit. That’s the direction manufacturers are going with adaptive cruise control, lane keeping and automatic emergency braking.

  • avatar
    AVT

    Correct me if I’m wrong, but wasn’t this one of the reasons the previous ceo, mark fields, was let go. Investing to much in mobility solutions with no positive cash flow from said investment as a result. Thus the resulting stagnate stock price. Thus feels a bit like full circle to me.

    • 0 avatar
      Matt Posky

      You will not be corrected because you are not wrong.

      There are some differences, I suppose. Fields’ strategy involved creating the vision of a futuristic utopia while Hackett seems more focused on how all of this will make Ford money someday (which is also GM’s strategy). However the end goal appears to be more-or-less the same outside of the rhetoric used to impress investors.

  • avatar
    hifi

    Ford may have their mojo back in Detroit, but elsewhere they are looking really shoddy. The dealerships are ratty and outdated, and the cars are dull. The best thing they have going is the F150 (LOVE the Raptor) and maybe the Mustang if you live in Florida or the flyover states. My family used to be a Ford family. But today, I don’t know a single person who owns one.

    • 0 avatar
      DeadWeight

      hifi – With one or two exceptions, the F150 being one (it’s not great, but it’s competitive and obviously popular), Ford and Lincoln design and make garbage vehicles with awful reliability, sold by a network of slimy, shady dealerships (again, with few exceptions, that prove the general rule).

      Anytime people who are fanbois of a certain brand hear and/or read anyone knocking their preferred vehicle or manufacturer, their biases kick in, and they claw and scratch and hiss, regardless of the truth being spoken/written.

      Ford would be much wiser to take this 4 billion and allocate it towards their design and engineering departments to develop better executed, far more reliable vehicles, and to also make a substantial investment in the quality of their dealership network, and the competency and professionalism of the people who work at those facilities, as well as dramatically improving customer satisfaction scores.

      They, instead of doing this idiotic autonomous vehicle campus and program investment (which is idiotic), could literally shove 4 billion dollars up their collective a$$es, and it would yield just as good a return.

  • avatar
    Jerome10

    This is ridiculous IMHO.

    autonomous cars will have their uses, but this obsession with it, as if we’re all gonna start using glorified taxis that drive themselves within 10 years, is getting ridiculous. It’s the current “hot” thing, and I honestly think Detroit has an inferiority complex on top of that (big surprise in the Motor City, right)…they don’t want to let Silicon Valley do this work. When in reality they should stick to the vehicles and the building, which they do best , and let the computer engineers do what they do best. But no, gotta do it in house right?!

    They’re throwing so much money at something that may or may not happen, on any sort of significant level, much less make money, for decades. And as DW notes, they do have some urgent issues that could use attention.

    It isn’t just Ford, but they really seem to be hard for this.

    It’s also funny they seem so focused on the future with this, then on the flip go all in on trucks, a rather shortsighted move IMHO.

    And honestly, who the hell is looking forward to having more data mined and sold, and the advertising bombardment and lack of privacy that will also bring ? Sure I won’t have to be stuck driving in traffic, but is the alternative gonna be more creepy Facebook, Google kinda stuff? Cuz honestly I’m finding most of this new stuff is making my life LESS enjoyable. And you know, rather than swim in the cesspool of twitter,FB, constant news feeds etc, it might be really nice to get out and go for a good old drive, the manual way.

    • 0 avatar
      TMA1

      Connectivity may be making everyone miserable, but there’s no shortage of people staring at their phones. I take the subway into the city – a whole train full of people looking at their phones. None of them are putting a priority on data or personal privacy. If these people were in AVs, they’d be doing the same thing.

      The threats are real, it’s just that no one cares.

    • 0 avatar
      Verbal

      “…they don’t want to let Silicon Valley do this work. When in reality they should stick to the vehicles and the building, which they do best , and let the computer engineers do what they do best. But no, gotta do it in house right?!”

      You know what this reminds me of? Back when IBM (a computer hardware manufacturer) decided to compete with Microsoft by developing their own in-house operating system called OS/2. They spent billions on it. No one remembers OS/2.

      • 0 avatar
        jhefner

        Your example doesn’t work for three reasons;

        1. It was Windows NT that did in OS/2, and not MacOS.

        2. The problem was not that OS/2 was not any good; it was very good. The problem was that IBM and Microsoft agreed that Windows 3.1 was for home use only, and OS/2 was for business use. But software writers did not want to write software for both, and with Windows NT, Windows was as good as OS/2. But computers continued running on OS/2 for many years.

        3. IBM wrote their own operating systems for mainframes such as MVS. But rather than developing the IBM PC entire in-house (like Ford is trying to do), they used off-the shelf hardware, and hired Bill Gates to write the PC-DOS operating system. But once Microsoft released MS-DOS, anyone could build an IBM PC for less. All because IBM did not take the PC revolution seriously; it would be a similiar mistake for Ford to let others develop the AV for them..

      • 0 avatar
        jhefner

        Also, OS/2 shipped on IBM PS/2 computers. IBM knew they screwed up using off-the-shelf hardware on the IBM PC, and tried to offer a “better PC” with their proprietary PS/2 architecture. But people weren’t buying into it, and the PS/2 systems went nowhere; they bought PC compatible computers with Windows NT for a lot less.

        OS/2 was not the problem; IBM screwing up in the PC marketplace was the problem. Ford should be careful not to make the same mistakes.

  • avatar
    stuki

    Noone’s “betting” on anyone, anytime buying autonomous vehicles. Just on the Fed’s favorite welfare queens buying hype. Print enough money and hand it to “investors,” and the only “products” any CEO cares about selling, are stocks and bonds. The other, no longer significant, stuff, is at best part of some marketing plan to sell those two.

  • avatar
    redapple

    test
    test

    This pile of sheet working >>>>?????????

  • avatar
    Syke

    The real money here, eventually, is going to be in the design and marketing of ad-blocking apps, so you can be left alone in your self-driving car to read, work, watch porn, or whatever it is you want to do while on your commute. If Ford thinks all this data mining is going to result in a captive audience for marketing, they dreaming. For forty years now (starting with the Betamax), the public has been dedicated to avoiding commercials any way possible.

    Of anything, the the future the resistance is going to ramp up proportionally to the selling.

  • avatar
    Mike_H

    Ford wants to (1) stop building cars, and (2) build autonomous cars.

    I see a conflict in this strategy.

  • avatar
    alan996

    If I were a shirt tail relation in the Ford family with some stock I would be on a push to; 1-sober up all the other members of the family and 2-get Bill declared incompetent..

  • avatar
    MLS

    “The second you’re not preoccupied with driving your own vehicle, you’ll likely use its multimedia system to surf the web, make online purchases, or take in a movie. Automakers can charge for all of these things…”

    Um, no. Passengers will have connected personal devices and practically no one will pay extra to use automakers’ likely inferior multimedia systems. If that’s the business model, Ford is doomed.

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