Ford Fires Its CEO, and the Blue Oval Turns Its Hopeful Eyes To... Jim Hackett

Submitted by stephenrjking on

The dismissal of a CEO of a company as important to Michigan as Ford is a pretty big deal anyway. So a post about Ford firing Mark Fields amidst declining stock price and market share, after a mere three years at the helm, would probably warrant an OT post here.

But, hey, look who putting his cape back on and moving into the office: Jim Hackett.

A college football program might seem like peanuts to a multi-billion dollar corp, and the article only mentions his role here in passing, but let's face it: Hard to believe Hackett's exemplary performance revitalizing Michigan athletics wasn't something that helped show the board that he may be a guy that "gets it."

Yo_Blue

May 22nd, 2017 at 9:39 AM ^

No, Pintos exploding after rear-end collisions was actually a thing.  The company knew about it and covered it up for years.

Ford rushed the design and building of the Pinto and after failing nearly every crash test they tried went ahead and built them anyway.  There was a $5-8 dollar per vehicle fix but they opted not to fix them.  They actually did a cost benefit analysis comparing the cost of the fix to the cost to litigate and compensate burn victims.  Not one of Ford's finer moments.

Gulo Gulo Luscus

May 22nd, 2017 at 11:05 AM ^

A new car built by my company leaves somewhere traveling at 60 mph. The rear differential locks up. The car crashes and burns with everyone trapped inside. Now, should we initiate a recall? Take the number of vehicles in the field, A, multiply by the probable rate of failure, B, multiply by the average out-of-court settlement, C. A times B times C equals X. If X is less than the cost of a recall, we don't do one.

ca_prophet

May 22nd, 2017 at 12:19 PM ^

Ralph Nader published the book in 1965, driven by complaints about the Corvair's safety.  The narrative is that the industry vehemently denied all such claims and attempted to push him and the book into obscurity, and had nearly succeeded, when Pintos started going BOOM! and Nader was proven largely correct.

The reality is a little more complicated - the book was a best-seller in 1966 and spurred passage of the National Traffic and Motor Safety Act, the first real traffic safety law in the country.  GM proceeded to screw the pooch on the coverup, leading to Nader's successful lawsuit for invasion of privacy, which in turn gave Nader the money to advocate for consumer protection in many fields, which in turn helped create the EPA and pass the Clean Air Act.

At the same time, the NTSB had released its report on the Corvair, concluding that it was as safe as any other 1960-1963 car, and other industry analysts had found holes in Nader's research, one of which was that Nader ignored or dismissed deliberate tradeoffs between safety and affordability at a time when autos were really becoming safer every day.

So when Pintos started exploding, consumer safety and its primary advocate both returned to the forefront of the public's concern and used the opportunity to push for some major gains.

 

 

stephenrjking

May 22nd, 2017 at 12:54 AM ^

From the reporting in the linked article it sounds like one of the critiques of Fields was that he did not get the company on board with a unified vision. If there's one thing Hackett did well in his tenure, it was unifying the AD and flawlessly executing his plan. The contrast with the 2007 coaching search and the entire Brandon tenure could not be more striking.

So, in that sense, he seems like a good choice. There are some auto industry headwinds, but there's also a lot of potential for prosperity still left out there.

Blue in Paradise

May 22nd, 2017 at 1:35 AM ^

Self driving cars are going to be a huge opportunity. However, once those cars are out there - folks living in urban and inner ring suburban areas will need much fewer cars. Outer ring burbs and rural areas will still grow but they can't make up the volume.

I am reading that auto driving cars will be mainstream by 2022 - so we are not far off.

TrueBlue2003

May 22nd, 2017 at 2:25 AM ^

There's also the likelihood that autonomously driving car networks have the potential to be far more accessible in developing countries (since individuals wouldn't have to own a full car themselves, there could be shared fleets) and there is still massive opportunity for auto companies.  

The question will be whether the incumbents can win a share of the future auto market.  But there should still be a huge auto market for as long as any of us are alive.

Jasper

May 22nd, 2017 at 6:11 AM ^

I agree. It doesn't seem that the necessary infrastructure is in place. Also, at least as far as the U.S. is concerned, just imagine the legal environment the first time one of those things kills someone and an individual can't be blamed. How much money does Toyota have in the bank?

Aside: Good original post to start the week!

klctlc

May 22nd, 2017 at 9:54 AM ^

It will happen in the next few years but will not be mainstream for awhile (IMO). Infrastructure is huge. You need constant connectivity.  Plus people, especially old ones like me, like to drive.  It will happen eventually because it makes too much sense.

One example of significant change is insurance.  Who is insured you or the car?  How can you be at fault with no driver?  I know that can be overcome, but there are so many issues.

I am on a project for a new all electric small truck and it is fascinating.  The telematics involved can be pretty cool. But as a truck/car manufacturer you make a whole lot of money from parts and service.  All electric has no transmission, no EPA crap, and a whole lot less moving parts. A lot of lost revenue.

Ford never got the benefit of bankruptcy in 08/09. THey made a short term brilliant move in selling their image, had the money to ride it out. Their legacy costs have got to be huge.

Surprised at Hackett's age he would do this.

JFW

May 22nd, 2017 at 11:07 AM ^

currently, I can drive a '98 Jeep with a good engine, transmission, and brakes. Rust doesn't matter, cracked windshield, etc.

 

But an autonomous car I have to make sure all the sensors, etc. are in peak operating shape. 

 

The automaker may lose out in 'fix the transmission' costs but make it up in 'keep the flux capacitor up to date' costs. 

JFW

May 22nd, 2017 at 11:23 AM ^

Privacy is going to be dead in the future. 

 

'Sir, we noticed that you were driving through a high crime area at an above average rate of speed. We'll be increasing your premiums. And, given that you were parking close to a known brothel would you be interested in a montly supply of tetracycline and a Hallmark 'I'm sorry' card to your wife?'

klctlc

May 22nd, 2017 at 11:34 AM ^

We are early days in this. But there will have to be some consent to sell/use  the data. Possibly a slightly lower Interest rate or payment.  I am not an attorney, just a finance guy so people on the board may know more.

Look at the mobileye acquisition by Intel. We have that product on our truck.  Intel paid a ton

Nobody knows where this is going, but everybody wants to control the data.

Israel has a bunch going on in this sector with a bunch of different companies. 

Badkitty

May 22nd, 2017 at 11:56 AM ^

If you loan your car out and let your loser brother-in-law drive and he goes out, gets drunk, and hits someone, it's your car's insurance that's going to pay.  The insurance is for the car, not the indivdual driver.  

karpodiem

May 22nd, 2017 at 7:32 AM ^

there's a reason they test these things in California/Arizona. They wouldn't last five minutes going south on 75 during a snowstorm while trailing behind a semi that's swerving. And yes I know they are testing these vehicles in Michigan during the Winter; I'm involved in the supply chain - initial results haven't been very promising. 

That is unless you're ok with it just stopping on the side of the ride and waiting a few hours while this whole snow thing works itself out.

uferfan

May 22nd, 2017 at 8:25 AM ^

with hilarious features like "elderly driver mode" where the car self-activiates a turn signal for 10 miles for no reason. Or a "I'm listening to Sweetness by Jimmy Eat World" mode, where the car knows to go 15 miles an hour over the speed limit because a cool driving song is on the radio.

karpodiem

May 22nd, 2017 at 8:41 AM ^

self driving vehicles are no where near ready for use in climates that intermittently have snowfall, and won't be for same time - if ever. There will need to be a (another) technological breakthrough that will allow them to better navigate in these conditions.

jmblue

May 22nd, 2017 at 11:38 AM ^

Maybe now, but in the long run I think dual-mode cars (or whatever they'll call them) will be more popular.  I don't think people are going to want to give up all control (or even the possibility of control).

JFW

May 22nd, 2017 at 11:11 AM ^

A buddy is a transportation engineer (highways, etc.) and this is a long term goal for his company. 

 

And if you get enough autonomous cars, then me driving in my car just jams up the system. 

 

I hates it forever. Que up 'Red Barchetta'. 

jmblue

May 22nd, 2017 at 9:05 AM ^

There is a fear factor to overcome with self-driving cars.  A car is such a large investment that a lot of people will be concerned with letting the computer take over, even if that proves irrational.  (It probably also won't drive as fast as they would like.)  Insurance issues when accidents occur will be interesting.  Does the self-driving car get the benefit of the doubt?

I think the transition will be very gradual, and possibly never complete - I could picture some people using self-driving mode only part of the time, like in stop-and-go traffic, and continuing to drive themselves in other situations.

 

 

 

 

lilpenny1316

May 22nd, 2017 at 9:38 AM ^

Even if you could buy/afford a self-driving sedan for $40K, insurance companies are probably going to jack your rates up due to the unknown reliability of those vehicles, especially in Michigan.  

To your last point, I could definitely see myself using that technology on long road trips in rural areas.  There's a stretch of I-40 between Oklahoma City and Albuquerque where it's virtually no traffic, except for a brief stretch in Amarillo.  I don't know if I could trust the technology in stop-and-go traffic.

Badkitty

May 22nd, 2017 at 12:03 PM ^

I think what will happen is if you want to drive your car, you will pay a hefty premium versus people who have autonomous vehicles.  

In 2015, 35000 people died in automobile crashes.  That's a lot of carnage.  Sometimes no one's at fault, but the majority of those deaths probably are due to bad decision-making by some human.  

Needs

May 22nd, 2017 at 12:33 PM ^

The Ringer's Channel 33 just had a good podcast on the advent of autonomous cars. I think it's a little too credulous, in that the host is a 30-year-old New Yorker who doesn't have a license (the premise is "should I learn to drive, or can I just wait for automation?") Almost all the interviewed subjects are either on the inventive or regulatory side, and it doesn't really touch on the fact that many people actually enjoy driving, but it does give a sense of the issues at the moment.

It's the May 19th episode "When the Robots Reach the Road"

https://theringer.com/channel-33-podcast-pop-culture-sports-tech-6b4b49…

 

 

Brian Griese

May 22nd, 2017 at 9:31 AM ^

think self driving vehicles will ever be "mainstream" for one specific reason: insurance. Hear me out before you laugh. If a vehicle is self-driving, doesn't it stand to reason the car company would have to insure it? If in the answer is no, why in the hell would I buy a car insure it for liability reasons when I'm not doing the driving (assuming you're liable when you're using it non-autonomous mode, obviously)?

There is no way a car company can afford to purchase liability insurance for every self-driving car if they ever became "mainstream."

I work in insurance, and ironically have a close family member who's an engineer at Ford who is in the process of trying to transfer to their autonomous department. I pondered the same secneraio to him and he admitted he had never even thought of that.

tpilews

May 22nd, 2017 at 9:52 AM ^

I would assume that your insurance would cover you and the contents (and any damage done to property). I would guess it would be handled like a "no fault" state. Assuming autonomous cars will eventually be 99.9% safe, insurance will be incredibly cheap. 

mgobleu

May 22nd, 2017 at 10:00 AM ^

I had this same suspicion. Manufacturers will just tattoo their vehicles with a thousand warning labels, yet the novelty of a self driving car will be enough for some people to waive the manufacturer's liability at the point of sale. I'm also assuming the premiums will be higher until the technology is proven, which could take several product generations.

SugarShane

May 22nd, 2017 at 9:13 AM ^

My ass they'll be mainstream in 5 years. There's a difference between the technology being there and the general population accepting it, the legal issues ironed out, the infrastructure being in place, and the technology being affordable.

Anyone this bullish on technology should realize that There are still hospitals that use paper charts

MaizeAndBlueWahoo

May 22nd, 2017 at 11:38 AM ^

Which work just fine for their purposes, too.  The Silicon Valley view of technology seems to be that people will adopt whatever comes out, because it makes their lives better - regardless of how incrementally.  In the real world, people weigh the improvement against the disruption to business or everyday life, and the cost of adoption, and end up moving a great deal slower.  SV doesn't care whether or not the old thing still works.  The real world does.