“History is more or less bunk. It is tradition. We don’t want tradition. We want to live in the present, and the only history that is worth a tinker’s damn is the history we make today.”
It’s a comment one might expect from a T-shirted boss of a Silicon Valley tech start-up aiming to turn the world on its head. In the cut-throat tech world, disruption is all and damn the begrudgers.
However, the quote is much older and comes from Henry Ford, another of the world's great disrupters. From mass production to affordable motoring for the masses, Ford's legacy stretches across the 20th century.
Whatever you think of his view on history, he left behind an imposing legacy for the subsequent generations of Fords to live up to.
And despite a turbulent history of familial conflicts and controversies over the decades – many that would make great fodder for a daytime soap opera – the challenges faced by William Clay Ford jnr are arguably the most significant since the days of his great-grandfather.
Bill Ford, as he prefers to be called, is the blue-blooded scion of the founder of the blue oval brand. Yet he comes across like as an easygoing west-coast liberal, the sort of guy you'd expect to meet in a coffee shop on the campus at Stanford University.
His friendly demeanour and easygoing mannerisms belie the head of a firm in constant battle with battle-hardened rivals, a man who saw off family rivals for control of the Ford empire, and kept shareholders on board as the firm fought to stay afloat during the recent financial crisis, becoming the only of the US auto giants not to go to Washington for a bailout. Now he faces into a tech revolution that could be the greatest challenge in the firm's 103-year history.
Disruption
In an age where smartphones and tablets seem more desirable to young consumers than sports cars or pick-ups, the blue oval brand joins the rest of the motoring behemoths in facing into a major disruption.
The disrupters of the early 20th century turned towards evolutionary change in the last 40 years, focusing on gradual improvements on fuel economy, comfort features and design.
That’s all about to change in the coming decade or so. The advent of viable alternatives to the combustion engine – either hydrogen or plug-in electric power – has coincided with the rapid roll-out of driver aids, ultimately leading to the arrival of driverless cars on our roads. A throwaway date among the industry is the target of 2020 for first production models to hit public roads.
Coinciding with these engineering revolutions is the socio-economic impact of the advent of a sharing economy. At the forefront are firms such as Lyft, Uber and the like, hoping to remove the need to own a vehicle outright, but rather simply pay per use in a pooled ownership way. This model removes the usual array of charges and costs that comes with private car ownership.
A future of electric or hydrogen powered, autonomous vehicles operated via sharing schemes seriously changes the landscape for a business model structured around building and selling metal, often marketed on a “fun to drive” basis.
Does the future cause Ford to fret? To judge by his demeanour one suspects not. “We have domain knowledge of all these future areas. If we just defined ourselves as a car and truck manufacturer then the future would be the smartphone. That’s really what spurred me years ago to think about this space differently, in a way that others when I first talked about it they looked at me like I was crazy. But I’m used to that, because I did that on the environment 30 years ago and I was considered a Bolshevik back then and so then it came to pass.”
Green hue
Ford’s reference to his past reputation is apt, for this blue-blooded great-grandson of the founder of the blue oval brand had a green hue when he first took centre stage at the family firm. It often seemed a contrarian position to take, particularly at motor shows where Ford spoke of the need to focus on reducing emissions and dramatically improving fuel economy, while sharing the stage with the latest monster pick-up. Yet the principles he applied were prescient. In the early 2000s car firms had to focus on fuel economy and efficiencies, for this was going to be a competitive edge when oil prices inevitably rose.
Some Ford foresight has also led to his creation of a venture capital investment fund, targeting start-ups in tech space, outside his motoring involvement.
However, before we get caught up in future-gazing and speculation, Ford has a few words of caution. “I know whatever I predict will be wrong because this world is changing so quickly.”
He also challenges that the current crop of youngsters reaching motoring age – millennials – aren’t interested in cars unlike their predecessors. The common-held view within motoring circles is that future generations see tech items as more of a status symbol than a car, and are more excited by the launch of a smartwatch than sports car.
“That’s not true. I had always thought that but research shows that the millennials are actually more interested than the previous generation in cars but they can’t afford them. It’s an affordability issue and we see that on our sites and at the shows.
According to Ford, what they would like in a vehicle is quite different from the past “and how they may access a vehicle is different than you or I did, but I think we can’t make the mistake to write off a generation. It’s true they are much more connected and expect to be much more connected throughout all aspects of life and they expect the car to be updated regularly, but they still like cars.”
The short lifecycles of consumer tech goods is putting pressure on the car firms, traditionally working on the basis of a seven-year timeframe for model generations, interrupted after three or four years with a mid-life facelift. Car firms have to update more often, bother in terms of software and also the vehicles themselves.
Updating software
“We are doing that now and we are updating software on a more regular basis. That’s changed than in the recent past. Our cycle times were very different between hardware and software and we’ve crossed that bridge now.
Ford reckons the big challenges to the dawn of a new motoring revolution are not tech hurdles but rather societal ones. “Whether it’s electric cars or driverless vehicles, there is a large societal issue at play. You have infrastructural issues on electric, you’ve got the price of these vehicles and the same thing here with a lot of the autonomous driving issues. The hardware is going to be ready ahead of the mass adoption. There are insurance laws, traffic laws and all these things that society is going to have to deal with and in fairness is starting to grapple with. Those all have to change.”
There’s also the clear difference between the technology behind smartphones and those controlling several tonnes of speeding metal. “You can’t simply be 80 per cent sure that technology is ready for ‘prime time’, unlike a lot of tech, where you can fix bugs as they come up.”
In terms of the timeframe for the big changeover Ford predicts a gradual change. Talk of autonomous cars used through car-sharing schemes and running on electric or hydrogen may seem ambitious for first-world urban life, but they are pie in the sky for underdeveloped rural parts of the world. That means, says Ford, global car firms “are just going to have to straddle both worlds and that’s okay”.
“There are going to be new revenue streams coming our way,” he says confidently. He doesn’t seem fazed by the challenge of the tech giants entering the motoring world.
Partnerships
The firm is hoping that partnerships – something Bill Ford references throughout our conversation – could hold the key. These will be with start-ups, tech giants but also rival car firms. Partnerships is what kept Ford afloat in the financial crisis: the dual efforts of Bill Ford and chief executive
Alan Mulally
, poached from
Boeing
to rescue the ailing car giant. With Mulally gone, Bill Ford needs to ensure that the strategic plan mapped out by the two of them is kept on track.
In the new order of electrically-powered, autonomous cars operated by sharing schemes, the brand will need to fight its own corner for survival. There are ample car brands now consigned to the scrapheap that prove a strong heritage will not save it. As his great-grandfather said: “If everyone is moving forward together, then success takes care of itself.”
