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New Ford CEO: Silicon Valley may need Detroit more than it thinks

Jul 26, 2017, 21:38 IST

Ford

New Ford CEO Jim Hackett tacked his fist quarterly earnings call on Wednesday after the carmaker posted stronger results than Wall Street expected. (Wall Street didn't care, by the way, as shares slid 2% in Wednesday-morning trading.)

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Hackett - who replaced Mark Fields in May amid a disappointing stock performance and speculation that Ford was lagging competitors in pursuing new transportation technologies - wasted no time in articulating a fresh story.

He highlighted Ford's "incredible history and future," but quickly noted that in his capacity as CEO of Steelcase and as the head of Ford's Smart Mobility initiative, he had often traveled to Silicon Valley and then praised the technology industry's enthusiasm for "optimism, innovation, and questioning of the status quo."

"Being a young company is cool" he said of what he encountered on his visits, suggesting that one of his main goals at Ford it to bring a youthful spirit to the 114-year-old automaker, accelerating decision-making and playing to win.

But Hackett was careful to avoid the assumption that Detroit and the traditional auto industry are about to be disrupted out of existence by tech firms and new competitors, mainly Tesla and Uber, as the world of personal transportation changes.

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"What tends to happen," he said, "Is that we over-romanticize the future."

Ford

Does that mean that Silicon Valley's impact on mobility - Tesla, Uber, Waymo, Apple's mysterious Project Titan - has been overstated? After all, Tesla has rarely shown a profit and builds fewer cars in a year than Ford builds in a month. Uber is in a full-blown management crisis, Waymo has thus far been unable to monetize the many miles its self-driving vehicles have racked up, and Project Titan could more accurately be called Project Pivot, as Apple has steadily shifted its mandate.

Business Insider put the question to Hackett.

"It would be arrogant of me to say that the Valley is in trouble," he said. "But I don't think we need to cede the future of transportation to them. They may need us more than we need them."

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This is where Hackett now finds himself: between the old and the new, trying to rise to the challenge of figuring out how a still-quote-profitable traditional business can reinvent itself yet again, as it has numerous times in more than a century.

Silicon Valley might have the big ideas. But when it comes to cars, Detroit know what it's doing when it comes to actually building them.

NOW WATCH: Ford replacing its CEO points to the short-termism on Wall Street

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