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Bill Ford: Mobility can lift margins

Exec forecasts "revenue streams ... the likes of which we've never seen'

Bill Ford said his ultimate goals, beyond making money for his company, are to improve people's lives and create environmentally friendly products. Photo credit: GLENN TRIEST

DETROIT -- More than a century after Henry Ford put the world on wheels, his great-grandson Bill Ford is trying to reinvent mobility.

Ford Motor Co.'s executive chairman is moving the company beyond selling cars and trucks to investing heavily in mobility services such as ride sharing and partnering with cities to solve congestion problems.

"I think this is a huge opportunity for companies," Ford said last week at the Automotive News World Congress here. "It's going to create revenue streams and business opportunities the likes of which we've never seen."

The company has predicted it could make profit margins of up to 20 percent on new services, more than double what it makes selling new cars and trucks. But getting to that point won't be easy, Ford said.

"We're going to need to make choices, and some of those choices are going to be wrong," he said. "We have to accept that."

Ford said his ultimate goals, beyond making money for his company, are to improve people's lives and create environmentally friendly products, a cause he has championed for years.

At the heart of the company's transformation is a desire by Ford himself to protect the planet -- and his great-grandfather's legacy -- that grew out of an "awakening" he experienced in college.

His professors talked about the industry "in a way I had never heard before, and it actually really scared me," Ford recalled. "If this is the way the next generation will be educated about our industry, I felt like we could become the tobacco industry if we weren't careful, where the best and the brightest young people didn't want to work for us, and that our employees would someday have to apologize to their family and friends for working there. I never wanted that to happen."

When he returned to the company as an advocate for change, Ford recalls, some executives advised him to stop associating with environmentalists -- advice he rejected.

"At some point somebody's got to build bridges between the two communities, and if they don't public opinion's going to form and it may not be in our favor," he said. "It struck me that always battling wasn't the way to win."

Ford said the company's transformation began with the redevelopment of its River Rouge complex near Detroit, where it installed a living roof, and with investments in environmentally friendly products.

Ford said hybrid and electric vehicles will play a large role in the new world of shared mobility, and his company will develop 13 electrified vehicles in the next five years, part of a $4.5 billion investment in electrified vehicles by 2020. It's also working to launch a fully autonomous vehicle for fleet use by 2021.

He said the stakes are high.

"There will be separation between companies in a way we haven't seen before," Ford said. "If we get it right, we'll be a much higher-margin business. ... If we get it wrong, we'll be irrelevant."

You can reach Michael Martinez at mdmartinez@crain.com -- Follow Michael on Twitter: @MikeMartinez_AN

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