4 ms·

I find it very interesting and frankly quite stupid that Ford is attempting to become an Uber / Silicon Valley / Technology type company[1]. They practically ma

• rm_-rf_slash 10y ago
  Ford was also the only major American car company that didn't need a bailout when other auto Titans were groveling for cash. I wouldn't count them out of the race just yet.
• malchow 10y ago
  It was smart when semi companies became IP shops and outsourced fabrication, clambering up the value chain and expanding margins. I predict it will be seen as similarly smart for Ford to invest in software now.
• simonbarker87 10y ago
  A couple of big auto companies are doing this in one form or another, GM have a start up arm based in Kitchener and Nissan are advertising for jobs at a new connected transport "start up" spread across SV, Paris and Tokyo. I'm sure there are plenty of others doing something similar.
• mkagenius 10y ago
  One of the biggest reason big companies fail is they get disrupted by smaller players mainly because they are not able to do new innovative things on their own because of drag of a giant company.
  • wahern 10y ago
    Not only a drag, or not even a drag. It's been a long while since I read The Innovator's Dilemma, but the ground-breaking thesis in that book as I remember is that established companies are disrupted because it's 100% rational for them to continuing pursuing and maximizing profit in their established market, even while obsolescence is knocking on their door. The dilemma is that they have to choose between maximizing profits in their current market and returning unused capital to stockholders, or burning money on speculative investments in a bid to remain relevant in the future. Were labor and capital markets frictionless, it wouldn't even be a dilemma. The answer would be obvious--choose the former. Any investments you divert from maximizing your current advantage is always a net loss. Excess capital is best given back to shareholders because "the market" will do better at choosing the next disruptive technology than any single person or business would be. That you're doomed to obsolescence and will eventually have to wrap up the business doesn't matter; what matters is maximizing profits. But because labor and capital markets aren't frictionless, it's not optimal to let an existing business entity disappear. Think fixed costs like HR; or brain trusts. Finding the balance between maximizing your current market position and speculating on disruptive technologies is therefore arguably something worth pursuing. But as labor and capital markets become more free and liquid, there's less of a dilemma. Anyhow, long story short, companies aren't disrupted because they're dinosaurs and antiquated. They're slow to respond because it's often perfectly rational (i.e. more profitable) for them to ignore new technologies and to continue pressing their advantage until the very end. And that incentive aligns well with maximizing global profits and capital investments. The intuitive sense that companies are doing something wrong by not preparing for disruption is irrational as a general matter. You prepare for disruption by making as much money as you can and jumping ship at the very last moment; doing anything else is leaving money on the table.
• pb 10y ago
  In ten years, all auto makers will either be tech companies, or they will be out of business. I'm impressed that GM and Ford have the foresight to understand this.
  • mox1 10y ago
    100% disagree. Manufacturing is hard, ask everyone who has done a physical product kick-starter. Giving X people mac books and asking them to write a "Clone of X Tech Startup" is not that hard, just potentially time consuming. Now, Ford may USE technology to improve their manufacturing and core product (a transportation device). They may become an ultra high-tech manufacturer (if they aren't already)..., but they will not magically become Google or Apple.
    • pb 10y ago
      It's not like they are going to suddenly lose their ability to manufacture products. The key is that their differentiation and survival will depend more on software and soft systems (such as bus lines) than it does on manufacturing prowess (where they are all quite good at this point). It's also worth noting that Apple makes some impressively complex (and profitable!) hardware.
      • deleted 10y ago
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    • discodave 10y ago
      Just because manufacturing is hard, doesn't mean you should stick to it. Cars are already a commodity, if Uber/Google/Apple manage to deprecate car ownership in favour of centralized fleets then being a car manufacturer will be a low margin cut-throat business. Think about how much of the machinery (and profits) of the car business would get eaten. No more annual model updates, no more advertising, much smaller luxury market and so on. In that world it makes sense to try and move up the stack to own your own destiny and capture profits.
    • Apocryphon 10y ago
• awad 10y ago
  Ford did $7.373 billion in net income on $149.5 billion in revenue 2015. If the $30 million number purchase price being thrown around is correct, that's ~ 0.4%. Not at all a terrible investment to make for a company of Ford's size. Nokia, Motorola, RIM, Palm were leading manufacturers as well, and they all had their lunch eaten.
• wyldfire 10y ago
  I dunno -- if self-driving cars become so good, so safe, so ubiquitous -- they'll be more like a utility. Why own a car and all the maintenance hassle, or for a family -- why own two? If that comes about, then the automobile market would likely shrink or growth would stagnate. Purchasing of automobiles would be much less about any kind of individualism/style/brand loyalty. Competition for share would be more intense. Ford would do well to try and integrate itself into the service-provider realm to stay relevant.