Ford’s Silicon Valley Unit Eyes Future of Transportation

PALO ALTO, CA – Long-settled assumptions about the automobile businesses are under stress and automakers are courting new partners to better understand the shifting landscape where the pace of change is accelerating.

In a bid to keep its business footing solid, Ford is expanding its technical center here in the heart of Silicon Valley, an epicenter of the social and economic change fostering new businesses and new business models.

For Ford CEO Mark Fields, who is no stranger to Silicon Valley’s unique culture, growing the Dearborn, MI-based automaker’s outpost near San Francisco is a necessity not a luxury.

On the one hand, Fields says, Ford intends to continue focusing on “great” products for a wide audience. But on the other, it also wants to capitalize on the technical knowhow, pace of change and opportunities of the West Coast.

“I think it's very important for us,” Fields says of the Silicon Valley office.

“We’re never going to take our eye off being a great developer of cars, utilities and trucks. But there could be opportunities for us, so it’s very important to open up that lens,” he tells journalists following a recent speech in San Francisco.

Ford has had a modest presence in Silicon Valley since 2012. The Ford Research & Innovation Center opened in January 2015 in a repurposed building in the Stanford University Research Park. It has 40 employees but the number is expected to grow to roughly 65 by mid-summer and then double by the end of 2015, making it one of the largest automotive-oriented research centers in the San Francisco Bay Area.

Only the Mercedes-Benz Research & Development Center in Sunnyvale is larger.

Ford’s Palo Alto research center concentrates on innovation in connectivity, mobility, autonomous vehicles, customer experience and big data, says Kenneth Washington, vice president-Advanced Engineering and R&D at Ford.

The research center also underscores the dramatic way computer-driven technology is reshaping the auto industry.

“Information technology used to help us do the heavy lifting in the back office,” says Don Butler, executive director-Connected Vehicles and Services at Ford. “Now it’s become our business.”

HP, SAP, Spotify Among Partners

During a recent tour of the innovation center, Ford highlighted several areas where research into 3D printing, lightweight materials and the emerging “Internet of Transportation” will play key roles in the industry’s future.

The expanded R&D unit also will work closely with engineers and designers in Dearborn and Europe. Employees from those other locations, as well as Asia, will rotate through the center for short periods working on specific projects.

The unit will serves as a contact point for Ford’s collaboration with partners in the Silicon Valley ecosystem, such as Hewlett Packard, SAP, Spotify, Pandora, Glympse, 3D Robotics, Intel, Google and Apple. The partnerships build on the region’s unique culture, which is intensely competitive yet highly collaborative.

Fields calls Silicon Valley unit “important lens” for automaker.

HP CEO Meg Whitman has spoken previously of her company’s long relationship with Ford.

But the advent of new technology, such as 3D printing, and of so-called Big Data, where enormous amounts of information are collected and analyzed to guide drivers, customers and decision makers, have served to expand what has been a longstanding partnership, Whitman adds.

Stanford also has emerged as key Ford ally in Silicon Valley. The institution helped the automaker develop algorithms for its experimental autonomous vehicles. SAP, which creates business-systems software, influenced Ford’s development of ways to better manage the services of connected vehicles on the road today.

Silicon Valley can solve parking problems, too.

In many urban areas, parking comes at a premium and often is hard to find. However, emerging technologies, including smartphone apps connected to traffic information and navigation systems could reduce the time it takes to find a parking space and, as a bonus, reduce emissions and improve air quality, says Mike Tinskey, director-Global Electrification and Infrastructure at Ford.

Earlier this year, the R&D center helped Ford launch 25 experiments exploring various facets of the next-generation transportation system. Sixteen of the experiments, which were part of a Ford Smart Mobility initiative, are closed. Now after six months of gathering data and consumer insights, Ford has honed in on two strategic areas – the flexible use and ownership of vehicles, where customers can lease their idle vehicles to others and multi-modal urban travel solutions using smartphone apps to line up alternative methods of transportation, such as an electric bike if an automobile is impractical for part of the journey.

Other experiments are under consideration, Fields says.

“Our goal is to make people’s lives better by helping them more easily navigate through their day, address societal issues and, over time, change the way the world moves – just as Henry Ford did more than 100 years ago,” he says.

But the Silicon Valley location also will propel change within Ford, the automaker says. Ford sees itself as an industrial conglomerate with well-honed processes and procedures designed to embrace change.

Rapid social change, says Ford futurist Sheryl Connelly, compels economic and technical change. For example, the number of megacities across the globe with populations of more than 10 million is growing, and two-thirds of the globe’s population resides in urban areas where congestion and pollution will be major issues and that places heavy pressures on transportation systems, Connelly says.

Look for various sorts of automated transportation to play a big role in urban areas, she adds.

Says Tinskey: “The trends are real. Technology is moving forward and Ford has to move with it.”