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Not mentioned here, but in this Techcrunch article, is Ford’s expensive flip-flopping on AV: https://techcrunch.com/2023/03/02/ford-forms-automated-driving-sub
by roseway4 4y ago
Not mentioned here, but in this Techcrunch article, is Ford’s expensive flip-flopping on AV:
https://techcrunch.com/2023/03/02/ford-forms-automated-driving-subsidiary/ https://techcrunch.com/2023/03/02/ford-forms-automated-drivi...
> Argo AI burst on the scene in 2017 stacked with a $1 billion investment from Ford — and Iater an investment from VW. The startup shuttered suddenly in October 2022 after Ford and VW determined they would no longer pursue AV technology, at least not under the Argo umbrella. Ford said, at the time, it was making a strategic decision to shift its resources to developing advanced driver assistance systems, and not autonomous vehicle technology that can be applied to robotaxis. The company said it recorded a $2.7 billion non-cash, pretax impairment on its investment in Argo AI.
- p1esk 4y agoWait, so they killed the 550 person AV startup they were funding, took 2.7B loss, and 4 months later hired those same 550 people to resume the same work? Something looks seriously wrong here.
- Tuna-Fish 4y agoPossibly they wanted to restart the company without the external partners (mainly VW)?
- jnsie 4y agoMaybe but there's got to be a less expensive way of doing that. Buying VW's stake?
- threeseed 4y agoI am sure if there was a simpler way Ford would have done it. The obvious reason is that VW either (a) doesn't want to sell it or (b) wants to retain IP.
- bluGill 4y agoI doubt they can buy VW. The German government has an interest and Porsche most of the rest.
- garyfirestorm 4y agoI think he meant buying VW’s stake in Argo AI. Not buying VW itself.
- mock-possum 4y agoI do kinda love that they interpreted it that way though. I’m picturing some coked out Ford exec screaming at his vp of finance “do we or do we have enough money to buy VW??!”
- shjake 4y agoThey don’t. But it’s not like anyone could buy VW it’s partially owned by the state and the trade unions could easily block it. All of that is reflected in VWs share price. Without all this ‘socialism’ VW could probably easily buy Ford itself, maybe even GM.
- shjake 4y agoPorsche is the majority shareholder in VW and VW itself owns 75% of Porsche (100% before the IPO)
- willvarfar 4y agoWait, what?! How can you have cycles in an ownership graph? Ah, answering my own question, it seems to be called "circular ownership" and while it can sometimes occur from a long history of mergers and acquisitions (Samsung seems to be such a case), its generally a tax dodge or to mask ownership? At least, the top hits I see are all talking about it as a classic way to obscure oligarch ownership and things. Genuinely curious who actually gets to make the decisions.
- jeron 4y agoyeah, but what if you can make them hurt and restart the business? sometimes corporate leadership like to do petty things like this at huge cost
- chx 4y agoHuge cost? The board won't fire them for misspending a measly 5% of the their cash hoard. (" Ford Motor cash on hand for the quarter ending December 31, 2022 was $44.070B, a 11.14% decline year-over-year.") They wrote off 7.3B because of Rivian and still no one got fired. What huge cost?
- kryptiskt 4y agoRealizing a loss isn't bad, it only recognizes that money you have already spent is lost, it doesn't actually cost you anything and it's a nice tax write-off. If you can do that and you get to get keep the engineers, why not do that instead of keeping some fictional value for it on your balance sheet?
- zaphirplane 4y agoA company could write off a value or a partial value for an asset. Ford could have done that.
- bombcar 4y agoMaybe they wanted out of the VW contract agreements.
- madrox 4y agoHulu is an example of the same model. It was funded by a consortium of industry players, like Comcast, Fox, and Disney. Volkswagen and Ford were doing the same thing. Unlike Hulu, though, it wasn't successful. My guess is they felt leadership was lacking. I'm sure if you zoomed in, you'll notice some of the AV startup execs aren't among the 550.
- infairverona 4y agoWas at Argo and left latitude somewhat recently. You are spot on, most of Argo leadership is gone, most of the autonomy folks got picked up by either VW or Ford Latitude.
- lostlogin 4y agoI don’t get it. Are you implying that they folded the venture at that cost, the started it again? I get that HR and leadership are hard, but this seems far fetched.
- luckylion 4y agoWhat's the difference in keeping the same 550 people working under the old name with a $2.7bn cost sunk into it, and just acknowledging the $2.7bn as a loss and moving the 550 people to work under a different name. It's not like the name was a significant part of their product and they'd now have to spend a similar amount to get to a similar stage in their research and development, is it?
- lostlogin 4y agoFiring them hiring is a long way from free. Then add in the company start up costs and legal fees etc. Maybe I’m the mug, but that seems wasted money. When you are burning billions, the costs listed above seem to be treated as a rounding error.
- deleted 4y ago[deleted]
- scrapcode 4y agoWhat is the possibility that the decision to kill it was just really bad timing, right before this big "boom" in rapid AI advancement?
- nradov 4y agoPretty low. The recent boom in rapid AI advancement has been in LLMs, which don't seem directly applicable to autonomous vehicles.
- rl3 4y agoNot yet. That's because prompt engineering still hasn't been utilized in the sensor and decision control loops of autonomous vehicles. The future: [pandemonium as cars randomly crash everywhere] Microsoft Car. Powered by Bing. “Where do you want to go today?”
- shagie 4y agoI'd give Car Wars a read... https://doctorow.medium.com/car-wars-a01718a27e9e https://doctorow.medium.com/car-wars-a01718a27e9e Without being too spoilerly... yea.
- mLuby 4y ago> “Step out of the vehicle please.” > “Yes sir.” > I made sure he could see my body cam, made it prominent in the field of view for his body cam, so there’d be an obvious question later, if no footage was available from my point of view. Weird how sometimes both body cams malfunction at the same time. Technology is hard, let's go shopping.
- shagie 4y agoThe original publication of it at https://web.archive.org/web/20161126015615/http://this.deakin.edu.au/culture/car-wars https://web.archive.org/web/20161126015615/http://this.deaki... has some nice contextual graphics to it. As this was paired with an ethics class, there are questions to be considered about AI driving (and the corresponding instructor's opinions on those questions - don't vote on it right away as the javascript messes up the graphics for the rest of the page since the backend server isn't there anymore)
- dylan604 4y agoSounds like a way to dodge (hehe) some potential liabilities that might linger from keeping the second company active.
- RC_ITR 4y agoGenerally, in GAAP accounting, financial investments don't show up on the P&L (the thing that leads to earnings, which is the main metric a company like Ford is valued on). So even if they take $2bn of cash and send it to a start-up, it doesn't really affect their books (it has a balance sheet impact, but that's less important for short-term share pricing). A financial investment does have a P&L impact when the value demonstrably changes (either a new funding round, a bankruptcy, or some other event that defines a new share price). The most clear examples of this are in investment-based companies like Berkshire-Hathaway and Softbank, where quarters with billions of dollars of profit will be followed by quarters with billions of dollars of losses (despite very little cash actually moving in/out of the company). Ford, for whatever reason, figured that this startup wasn't worth what they paid (or that the structure wasn't the right one for their long term goals) and took the full P&L hit all at once (in a way that is easy to explain to Wall Street, since nobody likes ambiguous zombie investments living on the balance sheet). Operationally, they thought there was still value in the idea, so they directly hired the 550 people (closer to a $150mn/year cost) and that will now manifest as an ongoing cost on their P&L. Arguably, if Ford sees their work as core to Ford's future, then Ford should employ them directly and keep the costs on the P&L, so weirdly, this may be a signal that Ford is taking their work more seriously.
- nine_k 4y agoTaking a demonstrative loss on the books could be a tax-optimization maneuver, or so one could cynically suppose.
- notimetorelax 4y agoI’ve seen this happen at a big corp. One group of leaders decides to kill a product, takes the first steps, then the other group of leaders overrules them and restores the efforts. This can be driven by a pressure from the clients or partners, etc. Think of it as a rollback of a buggy release.
- gwd 4y agoIt doesn't even need to be a big corp. At some point, within a product group I was working with, two factions developed, one of which was championing technology X (which the product was already using), and another championing the idea of moving to technology Y. The messaging out of the product group seemed schizophrenic -- one time they's say, "We're moving to technology Y soon", and another time they'd say "No, we're going to stick with technology X". But the reality was that the factions never changed their minds -- the overall messaging from the team just depended on which faction had the upper hand at that point in time. We're probably talking about 20 people total, including the partisans and the other engineers / management that were getting dragged one way or the other.
- notimetorelax 4y agoHa, this is fascinating. Seems like a leadership failure as someone should have got them into one room and forced to come up with a shared engineering vision.
- BoorishBears 4y agoAll the replies are missing an important point: It is not the same work They were trying to solve L4/L5 using an all out approach that wasn't aiming to scale for personal ownership (yet, actually in the Argo shutdown letter, Ford essentially states they were shut down for not having a path to personal ownership in a workable timeline) They're now aiming to solve L3 primarily for personal vehicles. To reform it in computing terms they're going from a "vertical scaling" approach to "horizontally scaling" approach - This is like Cruise vs GM's awkwardly named "Super Cruise": Cruise exist outside of GM and is trying to solve L4/L5 by leveraging resources that won't scale to individual ownership for a long time "Super Cruise" is an L2 product already in vehicles you can buy today. "Ultra Cruise" builds on that product in newer GM vehicles, expanding where it works. After that you'll expect some basic L3 functionality like Mercedes' new Drive Pilot - There's honestly some interesting subtext to this. When Argo launched, it's almost certain Ford wanted that tech to go into their vehicles at some point. But organizationally, having Argo let them "hire" people who would not work at Ford due to their stuffy corporate nature. It also let them work on a more exciting problem than "enhanced cruise control". I talked with engineers on BlueCruise (the in house L2 product) and it seems Ford is slowly getting better about being able to compartmentalize and shield innovation from the general malaise of traditional auto manufacturing culture Latitude.Ai sounds like Ford having found a way to tie a quick moving business unit to themselves and hopefully not scare everyone off
- madaxe_again 4y agoThey will get the $2.7bn back from taxpayers, as this will be recorded as a loss under the scheme for investments in technology startups - I forget its name - where the government acts as guarantor on the debt. So: 1) they get a tax rebate 2) they get a large marginal rebate on their loss 3) they end up with the business anyway, possibly while making a net profit because 4) there are state level incentives for taking on those 550 workers. They’re just working the corporate welfare system, like all the others.
- intelVISA 4y agoTax evasion probs.
- pavlov 4y agoArgo had enough history that the cap table was probably very messy after years of funding rounds, investments from Europe, employee option grants... A buyout by Ford would have triggered all sorts of exit clauses. With this maneuver, Ford gets the essential part of the company, and also gets to write off 2.7B of goodwill from their books which is all tax deductible. What's not to like.
- cowsandmilk 4y ago> they killed the 550 person AV startup Argo’s website says they had 2000+ employees. So this new subsidiary is 1/4 the size. https://web.archive.org/web/20230119113422/https://www.argo.ai/newsroom/ https://web.archive.org/web/20230119113422/https://www.argo....
- helsinkiandrew 4y agoThey killed the 1700 person company they part owned/controlled with VW and then hired 550 engineers directly. If Argo.ai wasn't going in the direction they need for Fords products they could either get full control or kill it and hire the engineers. The latter might be more risky but is probably cheaper than buying, reorganising and making people redundant. The 2.7B was already spent - they've just moved it from 'investment' to 'losses' in their accounting
- onlyrealcuzzo 4y agoAnd you can also take a loss on it to avoid paying taxes on $2.7B of profits. And you can also hire those engineers back probably with a discount given the current environment.
- tssva 4y agoAccording to the article they will be working on assisted driving technologies for the immediate future and not autonomous vehicles, so not the same work.
- paul7986 4y agoRobot cars will take decades of slow progress to be realized otherwise tons of their drivers and innocent drivers will perish. Too many bought what used car salesman (his shtick) Elon Musk sold us and still tries to. Ford and others bought his sales pitch and followed him then realized wait this used car salesman is all talk/hubris
- boosting6889 4y agoIdk, the tech seems to be accelerating rapidly to me. Where were we 5 years ago?
- the_mar 4y agoProbably strugglins with zipper merges, unprotected turns, and inclement weather… … so same
- binoct 4y agoNot to say challenges don’t remain, but it’s undeniable the technology has come a long way in the last few years. https://m.youtube.com/watch?time_continue=318&v=aj8TRtr64xQ https://m.youtube.com/watch?time_continue=318&v=aj8TRtr64xQ
- aimkey 4y agoYou fell for the boondoggle. Waymo has a very narrow set of routes you can take. They collect ultra HD maps for those routes in SF which has a completely unsustainable human labor cost. It doesn’t scale to “drive me on any road”. Waymo is localized-only driving funded at a major loss by a search ads monopoly. Cruise does the same, just with VC money (and weird low-traffic hours of operation). They have not solved driving in the generic sense and they are fooling you (and investors)
- the_mar 4y agoI’m not hating, there is of course progress being made. It’s a tough problem, but I would not call it “come a long way”. https://twitter.com/irapolis/status/1631926001700835328?s=20 https://twitter.com/irapolis/status/1631926001700835328?s=20 And https://sfstandard.com/community/stalled-waymo-creates-traffic-chaos-in-mission/ https://sfstandard.com/community/stalled-waymo-creates-traff...
- rnk 4y agoAV means autonomous vehicle. Please define your terms.
- blitzar 4y agoAV means audiovisual - to me at least. I read it all the comments in that context and it pretty much made sense.
- rnk 4y agoI was trying to puzzle it out and then i googled it. I find discussions where everyone assumes you know a term that is a little bit specific extremely irritating. I'm special that way.