Failed Google deal left Fields in the lurch

At the end of 2015, it looked like Ford’s then-CEO Mark Fields was going to score a big win: a partnership with Google to develop autonomous vehicles.

The deal would have been a huge boon to Ford. At the time, none of the major automakers had spelled out a serious plan for getting fully self-driving cars on the road. And despite posting solid profits, Ford’s shares were falling because investors didn’t see anything coming down the line that they felt excited about. An announcement of a Ford-Google pairing could have significantly moved the needle on Ford’s share prices.
A look back at the timeline of the Ford-Google talks reveals a moment that became a turning point in Fields’ career at Ford. His failure to pull off the deal indirectly left Ford struggling to voice an autonomous vehicle strategy that resonated with stakeholders and led to the emergence of Jim Hackett as his replacement as CEO.
Sources with knowledge of the talks said the deal came undone because Fields’ enthusiasm for Wall Street’s reaction didn’t mesh with Google’s desire to lay the groundwork for a quiet, technical partnership in which each side learned from the other before deciding how to move forward.
A spokeswoman for Ford said the company does not comment on rumors or speculation.
Google was comfortable with the Silicon Valley approach of “frenemies” — sometimes partnering with competitors so each side can learn something. That concept seemed anathema to Ford, sources said.
Within weeks of the deal falling apart, Executive Chairman Bill Ford identified Hackett, a member of Ford’s board, as someone who had a good relationship with Silicon Valley. Hackett was named head of the new Ford Smart Mobility unit just a few weeks after that and was named CEO a little more than a year later. Here’s how it went down.
Early 2015
Google’s autonomous program was emerging as a leader in the self-driving realm, but the tech giant didn’t have a viable car platform to build on. Google wanted its first partnership to be with a carmaker that had a solid lineup of hybrid electric vehicles and was interested in learning how to integrate autonomous technology into production-car platforms. Google was drawn to Ford because of its reputation and scale, sources said. Google had been retrofitting Lexus RX 450h crossovers with self-driving tech, then it developed a cute car platform that looked like a koala. Those koala cars topped out at 25 mph and were designed primarily for testing, not selling to consumers.
Details on who reached out to whom first or how the talks began are unclear. But in 2015, executives in the Google autonomous car project, then run by Chief Technology Officer and technical lead Chris Urmson, began discussing a partnership with Ford executives.
The deal would not be exclusive: Google was free to collaborate with other automakers. But Ford argued that the partnership had to be big enough to make sense for the automaker and said it needed a large-scale commitment to justify the costs. Only a strategic partnership with long-term commitments would convince Wall Street this deal was beneficial to both sides, Ford said.
By the fall, both companies were getting close to signing an agreement.
Late 2015
In September that year, Google showed the first public signs it was serious about turning the self-driving car project into a business by hiring longtime auto industry insider John Krafcik and naming him CEO of the project. Krafcik, former CEO of Hyundai Motor America and also a former Ford engineer, was tasked with spinning off the unit into a stand-alone company.
In October, Google hit an internal milestone by operating the first unassisted self-driving trip on public roads in Austin, Texas, in one of the company’s koala cars. The technology was emerging as the only system that could actually drive itself without human interference.
But the company wasn’t looking to draw attention to that milestone. It waited an entire year before telling the world in December 2016 that it had conducted that first drive, rolling the announcement in with the news that it was spinning off the self-driving unit into a company called Waymo.
In early December 2015, Fields came to Silicon Valley to discuss the deal with Google co-founder Sergey Brin. In a region where there are so many electric cars that office workers often argue over charging stations to plug in their Teslas and Nissan Leafs during the workday, Fields showed up at Google with an army of staffers in a fleet of Lincoln Navigators. Sources said Fields and his team were armed with a plan to make a big splash out of the partnership news, and much of the discussion centered around making an impression on Wall Street.
The culture clash between the two companies was becoming evident. Google began to reconsider the deal.
On Dec. 21, news leaked that Ford and Google were in discussions. The news made a big splash, with Road & Track declaring: “This is a big deal.” Ford shares went up 2 percent the following day, and Google shares fell less than 1 percent.
Early 2016
The news stories about the Ford-Google deal contained an error: They said the companies were set to make the announcement at tech trade show CES in Las Vegas in early January. That had never been in the plan, but it left Ford dealing with an awkward situation. Ford announced at the show that it would triple its own driverless fleet, partner with Amazon to connect Alexa to its cars and use drones with F-150s.
The response was underwhelming.
Later that month, Google’s team reached out to Ford’s team to say they were backing out. Fields and Brin had a short text conversation that explained little.
A source inside Ford said the cancellation came within days of a planned presentation to the Ford board. Fields was incensed. Google’s cavalier approach to ending the deal — the source said Brin didn’t view the cancellation as “a big deal” and didn’t understand Fields’ frustration — left Ford executives stunned.
In February, Bill Ford organized a tour of Silicon Valley businesses with the entire Ford Motor board, which included Hackett. It was on that trip, he said at the press conference announcing Hackett’s new role last week, that he saw that Hackett was already familiar and ingrained in Silicon Valley culture.

“Every one of them were walking right up to Jim, and they gave him a hug and said, ‘I didn’t know you were on this board,'” Ford said. “The leaders out there said, ‘My gosh, he’s one of the real original thinkers that we know, and you guys are really lucky to have him on your board.'”

On March 11, Hackett had stepped down from the board and was named head of Ford’s Smart Mobility program, a new subsidiary focusing on new technology. The unit has gone from 12 employees to 600 in just a year.
Meanwhile, in May 2016, Google and Fiat Chrysler announced a partnership to develop 100 Chrysler Pacifica hybrid minivans. The deal has since been expanded to 500 vehicles.
It is unclear how much of a hand Hackett has had in the mobility deals Ford has inked since he joined the company as an executive. In the past year, Ford announced investments in lidar maker Velodyne and 3D-mapping company Civil Maps. It also acquired San Francisco-based Chariot, a ride-hailing company, and Israeli machine-learning developer SAIPS. And in February, the automaker announced a $1 billion investment in Argo AI, a Pittsburgh company developing artificial intelligence for self-driving cars.
Bill Ford made it clear at the press conference last week that he expects Hackett to get the automaker operating more quickly.

“The speed at which the world is moving really requires us to make decisions at a faster pace,” he said. “I don’t think we missed any opportunities per se, but if we’re going to win in this new world, we have to move fast and trust people to move fast.”

Source: Automotive News