Ford's decision to oust its CEO is the latest sign of how Silicon Valley technology firms are shaking the foundation of the American auto industry. The removal of Mark Fields after just three years at the helm - and his replacement by an auto industry outsider - followed a precipitous decline in Ford shares, amid concerns the 114-year-old US giant isn't on top of the challenges facing the industry, especially new technology.
For example, Ford won't introduce an autonomous vehicle until 2021, later than some rivals. "It seems as if most companies don't know what the future of mobility is," said Jessica Caldwell, director of industry analysis at Edmunds.com.
"They know there is a big business coming in the future, but no one has the crystal ball to say this is the right strategy." Is Detroit going to remain at the forefront of manufacturing cars, or will it become more of an outpost to technologists in Silicon Valley? The traditional players - General Motors, Ford and Fiat Chrysler - don't seem to have a clear answer.
Meanwhile, companies like Alphabet, Apple, Uber and Tesla are pushing hard on autonomous technology. Supporters of autonomous vehicles tout the technology as a way to reduce accidents and traffic jams. While the costs are high, they could be shared by multiple users. "The Fields exit demonstrates that Ford Motor Company and, by extension, the Detroit three automakers, haven't communicated as well as some other companies on their successes in moving toward autonomous vehicles," Jack Nerad of Kelley Blue Book said.
- Acquisitions and tech partnerships - Ford and GM are working on developing their own self-driving cars and have made investments of billions of dollars to acquire artificial intelligence and technology to detect obstacles. The auto giants also have opened research centers in Silicon Valley, hired hundreds of engineers and adopted a more tech-centered vocabulary, referring to the future of "mobility," not just cars.
In contrast, Fiat Chrysler has collaborated with Waymo, Alphabet/Google's self-driving car project, testing the technology on the Chrysler Pacifica minivan. Waymo also has a partnership with ride-sharing company Lyft, of which GM is a main shareholder. Uber also is testing autonomous vehicles, while Apple has received permission from the state of California for testing as well. "Nobody knows the right path," said Michelle Krebs, senior analyst at Autotrader. "You can't tell if the technologies will be profitable."
The Big Three's advantages include immense manufacturing infrastructure, extensive marketing know-how, nationwide sales and services networks, and robust research and development staff. These assets also are costs, Nerad said. "On the other hand, tech companies, with comparatively little investment in manufacturing, have much less to be concerned about as they push the envelope on self-driving tech," Nerad said. Adding to the challenges facing the conventional car companies is a slowing US auto market after a multi-year boom following the 2008 financial crisis.
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