Bill Ford- Silicon Valley can disrupt but cannot destroy Detroit

26 October, 2016

Published: 26 October 2016

Going by the news articles that cross our eyes every day we can easily be lured to think that Silicon Valley will be the ‘Mecca’ of next generation automotive. But the Ford Motor Co. executive chairman and great-grandson of auto pioneer Henry Ford, Bill Ford is not ready to give in.

 

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The old conversation I used to have was, ‘You guys are going to end up being the handset, you’re going to be low-margin assemblers of other people’s cool technology,’” Ford said. “We don’t want to be the handset. And we won’t be.”

He believes Silicon Valley can disrupt but cannot destroy Detroit. The complex task of mass production surely shifts the balance of power towards the traditional automakers. Auto manufacturing is a big thing it is not as simple as getting the codes right it has to be backed by world-class engineering and managing a long chain suppliers.

Apple and Google have also made it clear that they are not yet ready to enter manufacturing. Apple has shelved Project Titan and the slow pace of Google’s self-driving car project despite embarking on that path well ahead of its competitors has left people at its helm heartsick.

As James Kuffner, former head of Google Robotics and now chief technology officer at the Toyota Research Institute said

“All that complexity is something a lot of IT companies getting into the business realized the hard way, Despite what a venture capitalist tells you, making a car is hard.”

Automakers sensing the change have devoted themselves to developing their own self-driving cars. They have already been installing semi-autonomous features to their cars. But they lack in having sufficient numbers of software engineers and they are finding it hard to find bring in talent from Silicon Valley into their fold.

Scott Corwin from Deloitte Consulting says

“Eventually, the incumbents and the disruptors will need to get together, No single company has the resources or the know-how to put all the pieces together.”

The truce can be reached between the two sections when they acknowledge the indispensability of each other and decide to work together. Such alliances exist even today for example Volvo Cars is providing SUVs to Uber Technologies Inc. for testing as robot taxis in Pittsburgh. Fiat Chrysler Automobiles is supplying Google with 100 minivans for transformation into self-driving people haulers. Only these alliances will get bigger, larger and more dependable in near future.

But for now, the two sides look at each other with suspicion. Each wants to stake its own claim to a driverless future and reap the rewards. Toyota Motor Corp., Volkswagen AG, General Motors, and Ford have all conducted extensive talks with tech giants such as Google or Apple but in every case failed to come up with a way to share power.

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