With Ford’s recent decision to expand its presence in Palo Alto, Calif., – from 20 today to 125 researchers, engineers and scientists by year’s end – the 111-year-old car company will have one of the biggest automotive research center in Silicon Valley.
A region that is already home to the world’s largest car makers labs including BMW, General Motors, Honda, Mercedes-Benz, the Renault-Nissan Alliance, Tesla, Toyota, the Volkswagen group and more recently SAIC Motor, China’s No.1 car maker by sales, that recently established a venture-capital company lead by veteran investor Yoon Choi to tap advanced technology. Only Fiat Chrysler Automobiles (FCA) is missing to that list, opting instead for a “virtual” presence managed by Sunnyvale, Calif.-based, consulting firm Harvest Management Partners.
“The car is the biggest consumer electronics device you can have,” said Ford CTO Raj Nair. “And that’s the synergy that both Silicon Valley and Detroit are recognizing.”
However, the first challenge facing Dearborn, Mich., auto maker in expanding its R&D capabilities in Silicon Valley is to attract and retain top talents, competing with tech giants like Apple, Google or Facebook.
“Things that we’ve learned in spending time in Silicon Valley is to attract and retain talent by giving them meaningful and interesting work, beyond a competitive compensation,” said Ford CEO Mark Fields. “So what we want to do as a company, we not only want to provide great transportation solutions for customers, but we’re also doing many experiments to try and help solve some of the big society issues around congestion and transportation. And if that is not meaningful work that you can have, I don’t know what is.”
I sat down with Fields for an exclusive interview earlier this year to discuss a wide-ranging of topics, from Silicon Valley, venture investing, autonomous cars, electric vehicles and more. Below are edited excerpts from our conversation and here is the link to an edited version of the video shot during the interview.
FORBES: Why did you decide to expand Ford’s presence in Silicon Valley?
Mark Fields: We’ve been here since 2012 and we also obviously worked with companies in the Valley for many many years but our first location was in 2012. And we’re here celebrating the launch of our research and innovation center to really accelerate our work around Ford’s smart mobility in the areas of mobility, autonomous vehicles, connected cars, the whole customers’ experience and big data. And we’re going to staff this lab and this research center up to 125 folks. And we will be one of the largest dedicated automotive research teams here in the Valley. And they will plug-in to our network of product development centers and research centers around the world.
FORBES: Is Silicon Valley, the new Detroit?
Fields: We view this as not displacing work that we do in Detroit. But we view it as a complement to the talent that we have in Detroit. And here, in the Valley, the wonderful thing about the Valley is, it’s a marketplace of ideas. And we look at the talent, the creativity here and the interest in the car, that’s why it’s important for us to be here so that we can partner with folks etc, and complement the other talent that we have around the world working on other parts of the vehicle.
FORBES: Most of your competitors also have a venture arm in Silicon Valley to invest in innovative startups. What’s your stand on that?
Fields: We’re not specifically focusing on venture investments. Part of that is, there’s a good side and there’s a bit of downside on that, because if you find a technology and you decide to invest in it, what happens if 6 months later a new type of technology comes through and you’re already vested in another one. So we want to make sure that we leave ourselves the degrees of freedom and have the relationships so that when we look at developments we’re not handcuffed maybe by decisions we made previously from a financial standpoint.
FORBES: When do you expect fully autonomous vehicles on roads?
Fields: We have semi-autonomous vehicles on the road today which are the building blocks for fully autonomous vehicles down the road. Our vehicles today will help stay in your lane, they’ll help you park your car whether it’s parallel or perpendicular parking, they’ll adjust your speed based on traffic flow and potentially apply the brakes. So we have, as well as the industry has semi-autonomous building blocks towards fully autonomous vehicles. Probably in the industry our view is within the next 5 years, probably somebody will come out with a fully autonomous vehicle that is fully autonomous and maybe a pre-defined area that you can map and where the environment is right for the sensors. Our approach is we may or may not come out with a [fully autonomous] vehicle in that time frame because our approach is when we do, we want to make sure that it is accessible for everyone and not just let’s say luxury [car] customers.
FORBES: What’s your take on electric cars, especially with oil prices the way they are today?
Fields: They will be part of the landscape of the industry. The question is, how big. And our approach as a company is offer the customer choice, give them the power of choice. So we have a full lineup of electrified vehicles (conventional hybrid, plug-in hybrids, battery electric vehicles) and give them that choice. With oil prices where there at right now, clearly customer acceptance of that new technology and the cost of it is critical to how big it will be. And right now, what we’re seeing is despite the proliferation of electrified vehicles it’s not growing much. So as we go forward to meet our fuel economy requirements and as we go forward with the review with the government for the mid-term review, that will be part of the conversation: the feasibility around reaching those goals in the time frame that it was set.
FORBES: How do you see Ford’s future in this new mobile, real-time and sharing economy dominated by Uber-like services?
Fields: We are thinking ourselves more as as mobility company just as much as a car and truck company. Because we’re thinking about, in major urban areas where there is going to be more congestion and maybe less cars per 100 folks, how do we help be part of the solution of that congestion but also, is there a business in there that makes sense for us. That’s why we’re doing those 25 experiments around the world. Because what these experiments will do for us, first we think it will advance the discussion around mobility which we feel it’s important from a societal standpoint, it will allow us to understand – and in various parts of the world, help – how people are viewing their mobility challenges, and thirdly it’s going to expose us to a lot of new partners that we may decide to go forward with. But it’s all helping us to hopefully provide solutions that will help change the way the world moves.
This article was written by Jean-Baptiste Su from Forbes and was legally licensed through the NewsCred publisher network.