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Ford's Incoming Ceo Wants The U.S. Automaker To Run Like A Deere

Original source: NY Times

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From the moment he was named chief operating officer and heir apparent to the top spot at Ford Motor Co in February, Jim Farley has touted the growth potential of its commercial vehicles.


But it's not just more trucks and vans that Farley wants to sell. As Farley prepares to takes over as chief executive on Oct. 1, he is betting Ford can transform its commercial vehicle business to generate recurring revenue through sales of services that take advantage of the software, data and connectivity in its F-Series pickup truck and Transit vans.


"Think of it as a second F-150," Farley told Reuters, referring to the U.S. automaker's lucrative full-size truck business that generates $50 billion in annual revenue. "We have the F-150 everyone loves. There's this other business out here that's huge."


"Think of the data being more powerful than the fuel economy of the vehicle," he added.


Automakers like Ford have talked for a long time about generating post-sale revenue from connected vehicles, but they have struggled to deliver. As a result, Ford has been abandoned by growth-oriented investors, despite its lucrative F-series franchise.


Ford now is trying to show it can grow, and build a competitive moat around its commercial vehicle business before electric car leader Tesla Inc, other startups and larger technology players like Amazon.com Inc enter those markets.


The U.S. market alone last year accounted for more than $58 billion in sales of commercial trucks and vans, everything from Class-1 regular pickups to Class-7 heavy-duty trucks like the Ford F-750, according to ACT Research.


Farley is counting on a new hire to help build data-generated revenue from Ford's commercial vehicle business: Alex Purdy, former head of agricultural equipment maker Deere & Co's Silicon Valley office.


At Deere, Purdy led efforts to deliver artificial intelligence (AI) on the farm through smart equipment and founded John Deere Labs to help build a "sticky" relationship with customers. Deere's aftermarket parts and services business accounted for about 15% to 20% of $35 billion in sales last year.


In his first interview since his May hiring to lead Ford's commercial vehicle connectivity business, Purdy said he "helped transition an industrial goods business that thought about metal bending into a service business."



... GO TO Ford Wants to Run Like a Deere TO READ MORE

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