As you may have heard, Ford Motor Company has fired its CEO. As reported at Atlantic:
Ford Motor Company is expected Monday to replace Mark Shields, its CEO, with Jim Hackett, the head of its autonomous-driving unit, several news organizations are reporting.
Ford’s stock has declined more than 30 percent since Fields became CEO in July 2014. Last week the company announced it was cutting 1,400 jobs, about 10 percent of its salaried workforce, mostly through buyouts. The move was an attempt to assuage shareholders angry about the direction of the company, which has been buffeted by poor sales, lower-than- expected profits, and declining stock value.
Under the move being announced Monday, Fields, 56, will retire from the company he joined in 1989 and be replaced by Hackett, 62, the head of Ford’s Smart Mobility unit. Hackett served as CEO of Steelcase, the maker of office furniture, from 1994 and 2014, and, Bloomberg adds, “his promotion indicates Ford is looking to seize on that expertise as consumer demands change.â€
That last sentence took me aback. Are consumers really demanding autonomous vehicles? Or do software companies and manufacturers see them as a marketing ploy to spur lagging sales?
Over the last last ten years the length of time that Americans keep their cars has doubled. That’s bad news especially considering that worldwide productive capacity for automobiles, already much greater than the number of vehicles sold, continues to grow rapidly.
How to change that picture? Make the old cars obsolete!
Can someone articulate the economic case for autonomous vehicles? I understand the business case, i.e. why car companies would want to sell them. I don’t know why people would want to buy them.
The hype behind autonomous vehicles has always puzzled me. There’s a use case that’s much better suited to autonomous operation than personal vehicles: freight trains. It’s a much easier problem to solve and there’s a substantial body of law that could be extended to govern the liability issues. Autonomous choo-choos have been within our technological grasp for decades and yet somehow they’ve never been adopted. Why? I think it’s because they don’t make economic sense.
I’m not sure how to measure the effect in economic terms, but autonomous cars would have some pretty big effects:
– Short-leg air travel would be a lot less competitive. Compare riding in an autonomous car, with nice comfy seats, and have it drive me 300-400 miles overnight while I sleep with the ass-pain of dealing with the airlines. Amtrak would likely die off.
– Commuting won’t be nearly as bad, so people will be much more willing to live farther away from work. Since they aren’t driving they can use the commute time for other activities, including work With mobile internet people could be “on the clock” as soon as they get on the road. I could even see a special autonomous commuting minivan that would have a wardrobe and small bathroom – Conceivably, one could wake up, jump in the van, and get ready on the way to work.
– People will do a lot more driving. Cars will be designed more for comfort than they are now. That will have an effect on CO2 assuming current engine technology.
While irrational exuberance comes to mind, how about those making the investment decisions tend to be high income technophile first adopters instead of stodgy reads financial statements with a microscope types.
Self-driving cars do not fall asleep.
Self-driving cars do not drive while intoxicated.
Self-driving cars do not have road rage.
Self-driving cars do not mow down people for any reason.
While I do not think that they will be widespread usage in my lifetime, there will be some, and who knows what the next generations will desire.
The clutch is about to go the way of the dodo bird.
Andy, those are implications rather than justifications. I’d be greatly surprised if a desire to live farther from work motivated anybody to purchase an autonomous vehicle for the foreseeable future.
So, a disincentive? 😉
Dave,
Yes, they are implications but I also think they are justifications for why people would be interested in buying one assuming the technology actually works.
“I’d be greatly surprised if a desire to live farther from work motivated anybody to purchase an autonomous vehicle for the foreseeable future.”
If you live in, for instance, the DC area, this would be a huge advantage. I have friends who live there with 1.5 hour commutes each way.
Tasty mentioned drinking and driving and I think that would be a big one.
There’s a simple solution to DC’s housing problems. Take all of those government agencies and divvy them up among the states.
The late Robert Byrd had a black belt in that. Federal agencies have a remarkable number of offices in West Virginia.
In Fast Company:
Which explains why Americans are replacing their cars every six years rather than every three.
Just for the record we run our cars into the ground before replacing them. We expect to hold onto a car ten or more years before replacing it. We kept our 1989 Volvo for 20 years.
And, Dave, the 1989’s you trade off, I make payments on.
As for self driving autos, I can’t afford one, so you need a law to get me out of their way.
With per capita incomes stuck at roughly $30,000, there are only two ways this can make sense:
1)Americans will be motivated to take on a lot of additional private debt to finance purchase of these cars (not going to happen).
2) Government is going to enact a massive bailout of the global auto industry by heavily subsidizing buyers.
Antiplanner (http://ti.org/antiplanner/) has analyzed the autonomous car and truck situation several times, and one real economic benefit would be a substantial increase in the carrying capacity of our current road system plus a substantial reduction in accidents and their costs. He thinks that autonomous cars could replace light and heavy rail public transit in most cities.
One thing never mention with autonomous vehicles is the improvement in infrastructure that will be needed to ensure the cars stay on the road. We can’t afford all the infrastructure repairs we have now, let alone what would be needed for autonomous vehicles sensors.