2014 Detroit auto show: Mulally says auto industry needs privacy boundaries set by law
2014 DETROIT AUTO SHOW

Mulally: Auto industry needs privacy boundaries set by law

Mulally: "Our homes, the cars, everything is going to be on the Internet. Everything's going to be connected. And so what are the guidelines? What do we want?"

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DETROIT (Bloomberg) -- The automotive industry needs legislation to protect drivers' privacy as more cars utilize data for location tracking and other services, Ford Motor Co. CEO Alan Mulally said.

Ford is "supportive and participating" in talks with regulators who are considering such laws, Mulally said today at the Detroit auto show.

The automaker has retracted comments made last week by its global marketing chief, who said Ford knows when drivers of its vehicles violate traffic laws through its global-positioning system data.

"It's just really important that we have boundaries and guidelines to operate," Mulally, 68, told reporters on the sidelines of the show. "Our homes, the cars, everything is going to be on the Internet. Everything's going to be connected. And so what are the guidelines? What do we want?"

In-vehicle technology is the top selling point for 39 percent of car buyers today, more than twice the 14 percent who say their first consideration is traditional performance measures such as power and speed, according to a study that consulting firm Accenture released in December.

A separate Government Accountability Office report last month said that while carmakers and navigation-device companies are taking steps to protect privacy, some risks may not be clear to consumers.

Jim Farley, executive vice president of global marketing at Ford, said on a panel at the International Consumer Electronics Show in Las Vegas last week that Ford can use technology to know when a driver commits a criminal act.

'Absolutely wrong'

"We know everyone who breaks the law; we know when you're doing it. We have GPS in your car, so we know what you're doing," he said, according to Business Insider. "By the way, we don't supply that data to anyone."

Mulally said Tuesday that Farley's comments were inaccurate.

"What he said was not right," he said. "We do not track the vehicles. That's absolutely wrong. We would never track the vehicles. And we'd only send data to get map data if they agree that that's OK to do that, but we don't do anything with the data, we don't track it and we would never do that."

The GAO published its report in response to a request by Democratic Senator Al Franken of Minnesota, who in 2011 proposed a law intended to protect the privacy of mobile-device users' location data.

The report "underscores the need for me to reintroduce and pass my location-privacy bill," Franken said in a Jan. 6 statement.

Fiat, Chrysler

Franken is chairman of the Senate Judiciary Committee's Subcommittee on Privacy, Technology and the Law, and has offered separate proposals to require more disclosure by the National Security Agency of its operations, after documents released by former government contractor Edward Snowden sparked a firestorm over privacy concerns.

Sergio Marchionne, CEO of Chrysler Group and its owner, Fiat S.p.A., said Monday the companies don't collect data on its customers.

"We have been very, very wary of either having direct access in a personal way to the vehicle itself," Marchionne told reporters at the auto show. "We have left this information in such large data status that it cannot, in any way, shape or form, allow us to formulate a view of either a particular individual or a class of people."

The number of cars connected to the Internet worldwide will grow more than sixfold to 152 million in 2020 from 23 million now, according to researcher IHS Automotive.

"We're in a connected world," Mulally said today. "So this whole thing about our data, privacy, whatever; there's going to be a lot of good work done to establish guidelines and expectations. It's great that is happening now."

Still engaged

Meanwhile, Mulally emphasized that he remains deeply engaged in setting long-term strategy and the day-to-day operations at Ford.

"I'm still doing everything I did," he said. "I'm just spending more time on the longer term issues and I'm right there on the day-to-day issues. I'm the CEO."

His remarks came about a week after he removed himself from the sweepstakes to become the next CEO of Microsoft Corp following months of speculation. He also reiterated that he planned to stay at Ford through the end of this year.

Mulally spoke a day after Ford unveiled a revamped version of its top-selling F-150 truck made almost entirely out of aluminum, which the company hopes will widen its lead over rivals GM and Chrysler in the lucrative truck segment.

Ford originally announced Mulally's plans to remain at the automaker in late 2012, as part of a series of changes, including the promotion of Mark Fields, Mulally's eventual successor, to COO.

As COO, Fields now runs the weekly "business plan review," part of the structural changes implemented by Mulally.

People close to Ford said last year that its newly promoted executives have been making a mark on the company while Mulally contemplated the Microsoft role as well as setting the long-term vision of the company.

Those longer-term issues include Ford's growth overseas as well as how to serve the growing number of urban-dwelling consumers for whom buying a vehicle is impractical.

But this does not mean he has taken his hands off the wheel, Mulally said. He said he has now moved just one chair over from Fields and participates in every meeting.

"It's not like I'm doing one or the other," Mulally said. "Mark runs the BPR (business plan review) in the leader's chair and I'm right there with him every step of the way."

Reuters contributed to this report

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