Ford Motor is battling the image of an also-ran in autonomous vehicle (AV) technology. And this reality makes CEO Jim Hackett bristle.
In a recent conference call to discuss Ford’s decent third-quarter earnings, Hackett emphasized that a commitment to autonomous vehicles “is not a question here at Ford at all. It’s something that is really on track and I’m very confident about what it’s going to do for the company.”
Hackett further suggested that competitors might be over-promising when they point to a near-future in which our roads are filled with fully autonomous cars. General Motors and Tesla, for instance, might well find themselves under-delivering – and disappointing customers.
Hackett cautioned that in a “regulatory sense,” fully autonomous vehicles aren’t “really possible yet.”
Most if not all global automakers agree that no one knows when and how regulators around the world will fully adopt standards for the safety and operation of AVs. Beyond that, questions of liability remain unresolved. Who or which entities are responsible in the event of an accident?
On top of that, customer adoption remains a huge question. Who will buy AVs and how much will they be willing to pay? Hackett noted that the smartphone and personal computer industries did not evolve in a “linear” way, so it’s unlikely that the road from here to “smart” cars will be a straight line, either. Progress, it seems, will come in fits and starts, regardless of what AV acolytes and apologists are saying.
Hackett, in fact, appeared to hedge on Ford’s previous commitment to bring autonomous cars to market in 2021. Ford, he noted, is aggressively developing and testing AVs, but he noted that the 2021 launch date was set under his predecessor, Mark Fields. Fields departed Ford with a huge payout earlier this year.
Hackett emphasized that EV technology “is evolving in a non-linear way. And as all you write about it, I see you trying to peg when is it fully smart. And that is a really elusive question.”
In other words, no hard promises on the AV front — other than a promise that Ford is working on them and is committed to smart cars in general.
That said, added Hackett, the reality of AVs “is not a question here at Ford at all. It’s something that is really on track and I’m very confident about what it’s going to do for the company.”
Ford, of course, is in the early stages of a remake and re-set under new CEO Hackett. He signalled Ford’s new direction/s this month in a long-term strategic plan. Ford has also announced countless senior management changes in recent weeks.
In terms of immediate and tangible progress, October brought mixed results.
Consumer Reports hammered Ford in its most recent dependability rankings. The Ford brand placed 15th out of 27 brands, with Lincoln the luxury brand dropping to an embarrassing 22nd. Ford’s Focus and Fiesta small cars were both named among the least reliable vehicles.
On the other hand, Ford’s third quarter results beat analyst expectations. Net income came in at $1.6 billion, well ahead of the same quarter in 2016 (all figures in U.S. dollars). Ford has been diligently and aggressively cutting costs to boost the bottom line.
And the continued strength of the F-150 pickup has had a very good effect on revenue and earnings. The F-150 is truly a beast for rivals to reckon with. Ford said the average F-150 transaction price hit $45,400 per truck in the quarter, up $2,800 from a year ago.
CEO Hackett said the results were solid, but acknowledged the tremendous amount of work ahead. Among them: Ford is essentially the F-Series company. A one-product car company is vulnerable to any number of threats, of course. Worse, Ford posted a loss in Europe and while Ford expects Europe to be profitable in 2017, the returns will not match 2016’s.
Hackett emphasized that Ford is being refashioned into a car company that will compete and win on the global stage, a not so subtle dig at his predecessor in the C-suite. “And I can assure you that we’re committed to transforming our business.”