Ford's shake-up proves Detroit is facing mounting pressure from Silicon Valley (F)

pulse

May 22, 2017 4:36 PM

Ford CEO Mark Fields is out and has been replaced by the company's head of self-driving cars — and it says a lot about the pressure Detroit is feeling.

mark fields

Ford's replacement for CEO Mark Fields speaks volumes about Detroit's tense relationship with Silicon Valley.

Board member Jim Hackett, the head of Ford's unit overseeing autonomous driving, will take Fields' place as a sign of shareholders itch to ensure it doesn't fall behind in the race to develop mobility services of the future.

But the move also speaks to inevitable disruption where Detroit must either align with tech companies and split the self-driving-tech pie or stick to its guns and build a solution in-house, but risk losing out.

Detroit and Silicon Valley are in a complex situation when it comes to self-driving tech.

On one hand, tech companies can't compete with legacy automakers when it comes to the difficult task of manufacturing vehicles and meeting the strict standards set by regulators.

But on the other, Detroit has struggled to acquire the AI talent necessary to create fully driverless vehicles that can navigate difficult urban environment on the same timeline as major tech players like Waymo, the self-driving company spun out of Google's parent company.

We've already seen that dichotomy play out: Apple ditched its car efforts to focus on software and GM spent $581 million to acquire startup Cruise Automation.

When it comes to the Big 3, GM and Fiat Chrysler have arguably hedged their bets better than Ford.

In addition to its acquisition of Cruise Automation, GM invested $500 million in Lyft so it has access to a pre-existing ride-hailing network to roll out a fleet of autonomous cars. Although GM is using Silicon Valley tech and talent to its advantage, it's continuing to keep development in-house and compete head-on with Waymo and Tesla.

Fiat Chrysler, meanwhile, has sent over 500 Chrysler Pacifican minivans to Waymo for its self-driving test fleet and is rumored to be collaborating on a robot taxi service. FCA

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