Ford Motor Co (F.N) is establishing a new subsidiary to expand efforts to profit from transportation services, putting the former chief executive officer of Michigan office furniture giant Steelcase in charge.
The new unit, Ford Smart Mobility LLC, could invest in transportation services companies, but it is not solely a venture fund, Ford CEO Mark Fields said in an interview on Friday. “Their remit is to design, build, grow, and in some cases invest in, new mobility services,” he said.
Ford’s move comes amid a flurry of maneuvers by big automakers and automotive suppliers to buy or build the capability to sell transportation services, profit from high-speed digital connections to vehicles and engineer vehicles that drive themselves.
Fields didn’t disclose how much capital the subsidiary will have. “We want to be a leader and we will dedicate the appropriate capital,” Fields said.
Rival General Motors Co (GM.N) in July 2010 established a venture fund to invest in emerging automotive technology and seeded with $100 million.
Jim Hackett, currently a member of Ford's board, will leave the board to become chairman of Ford Smart Mobility LLC, Ford said. As CEO of Steelcase (SCS.N) from 1994 to 2013, Hackett led a sweeping overhaul of the office furniture company, and forged ties to many Silicon Valley companies that bought its products for their offices.
Hackett has “a tremendous network in Silicon Valley,” Fields told Reuters. Hackett will be looking for a CEO with a background in the technology industry, Fields said.
GM said Friday it is buying a small San Francisco company, Cruise Automation, that develops self-driving car technology.
Ford Chairman Bill Ford Jr. has been pushing executives at the Dearborn, Michigan, company for years to take seriously the challenge to the auto industry's traditional approach of concentrating on selling vehicles to owner drivers, and largely ignoring the revenue flowing toward transportation services.
“I knew seven, eight years ago that our industry was going to change and change dramatically,” Ford said at an appearance in Detroit last July. He launched an independent venture capital fund, Fontinalis Partners, that invests in transportation services, or mobility, ventures.
(Additional reporting by Paul Lienert; Editing by Jeffrey Benkoe)