Ford hires solidify Jim Farley's vision

DETROIT — Ford Motor Co. CEO Jim Farley's growth plans hinge on the company's ability to create recurring revenue streams from software-based connected technologies as well as improve on its lead in the commercial vehicle space.

A flurry of hiring announcements last week are designed to help the automaker achieve those goals.

In one of Ford's highest-profile additions in years, it poached Doug Field from Apple Inc. to become its chief advanced technology and embedded systems officer, a new position that reports to Farley. The automaker also announced a series of hires for its newly created Ford Pro commercial vehicle team, including a CFO, chief marketing officer, head of charging and other top jobs.

"I think what it says most is the opportunity this leadership team has to really change our relationship with customers," Farley told reporters following the Field hire. "This is just a monumental moment in time I think we have now to really remake a 118-year-old company."

The moves further solidify Farley's vision for the automaker as he wraps up his first year at the helm, a period in which Ford's stock has roughly doubled. Although shares have fallen recently as Ford faces manufacturing challenges related to the Bronco launch and ongoing semiconductor shortage, Farley has received greater buy-in from Wall Street analysts, who point to his pivot toward connected services, electrification and commercial vehicles.

Some are also excited by the company's product overhaul and believe Ford is poised for growth in the near future.

"The combination of accelerating production in North America, record performance at Ford Credit and cash generation, in our view, should provide momentum for the stock heading into 2022," Michael Ward, an equity research analyst with The Benchmark Company, wrote in an investor note last week.

Field is the type of talent who traditionally has shunned Ford and other legacy automakers.

Although he started his career as an engineer at Ford, Field was most known for his work at Tesla, where he led the development of the Model 3 sedan, and for two stints at Apple, the most recent when he reportedly was in charge of the company's secret car project.

But he said he was drawn to Ford for both its history and its potential future under Farley.

"Electrification, software, connected vehicles and autonomy are going to change everything," he told reporters. "And too often these new technologies are brought forward by startups and we lose some of the history in industries that have been built up over time. There's no company with a better history in this industry than Ford Motor Co. I became convinced that not only was the history here, there was a deep desire to really change and embrace these technologies and sort of build the best of both worlds."

Ford has begun offering over-the-air updates on some models and plans to broaden those services across its lineup. It plans further vehicle improvements on what it has called the proprietary Blue Oval Intelligence technology stack and last week announced it is expanding its app-based FordPass Rewards loyalty program to better connect with customers.

Farley has said these technologies will form an "always-on" relationship with owners, an area Field says he knows well from his recent work at Apple.

"In the mobile service arena, when you first purchase hardware it's not the end of the relationship, it's the beginning," he said. "Over time new operating systems are installed, new applications are discovered ... the automobile can become part of that same ecosystem."

Farley's software-as-a-service gamble will play out first in the commercial vehicle space, where Ford this year announced a spinoff business to focus on fleet buyers.

The six new Ford Pro appointments, who will all report to unit CEO Ted Cannis, are a mix of company insiders and outside talent from Samsung and The Walt Disney Co.

Ford has said it expects to nearly double the revenue it generates from commercial vehicles and services to $45 billion by 2025.

The Ford Pro business model will include dedicated vehicles, charging options and financing models specific to fleet buyers.

"With customer productivity as our North Star, this leadership team and our employees around the world are going to change how business in the commercial vehicle space is done," Cannis said in a statement.

Ford says it has a 43 percent share of Class 1 to 7 commercial vehicles in the U.S., and it plans to take a leading position with electric vehicles. Its first, the E-Transit van, launches this year, while the F-150 Lightning pickup is scheduled to arrive next year.

Farley said last week the commercial unit will be the first real test for the company's newest connected services.

"We're really excited about Ford Pro," he said. "That's, frankly, in the near term our big bet in terms of revenue for the company."