Two Ford Acquisitions Put Focus on Software -- WSJ

By Mike Colias Features Dow Jones Newswires

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (January 26, 2018).

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Ford Motor Co. is acquiring two small software firms to help build out its mobility business, a move that highlights the need for auto companies to seed their management teams with technology talent to keep pace in a fast-changing transportation sector.

Ford said Thursday it is buying Autonomic Inc., a Palo Alto, Calif., startup with 70 employees that is developing a software backbone for Ford to provide urban transit services to consumers and businesses. Ford said the firm's CEO, Sunny Madra, will lead a new team inside Ford that will come up with ideas for new transit options.

The nation's No. 2 auto maker by sales also said it would acquire TransLoc, a North Carolina firm that makes software to help transportation operators optimize drive routes. Ford didn't disclose terms of either transaction.

Adding talent through acquisitions has become a common strategy among conventional auto makers and suppliers as they scramble to compete with tech giants to develop driverless vehicles and build businesses around them.

Ford, for example, is spending $1 billion over five years for artificial-intelligence startup Argo AI, whose founders had previous ties to Alphabet Inc. and Uber Technologies Inc. GM in early 2016 bought autonomous-vehicle developer Cruise Automation in a deal potentially valued at $1 billion, based on performance milestones.

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Cruise, based in San Francisco, has become GM's Silicon Valley beachhead for attracting tech talent. GM has grown Cruise's workforce 10-fold in two years, to about 500 employees.

In acquiring Autonomic and TransLoc, Ford considered areas "where we thought we needed a really fast infusion of help," Ford Mobility President Marcy Klevorn said.

Traditional auto makers are leaning on acquisitions across a broad range of tech realms -- everything from software and hardware for self-driving cars to consumer apps -- as they prepare for a future in which cars are increasingly automated and connected to other parts of the transportation system.

BMW said this week it acquired Parkmobile, an app that allows users to pre-book and pay for parking spots. GM and Ford's Argo each recently acquired companies developing lidar, or laser-based systems that give autonomous cars a 3-D view of their surroundings.

Ford's approach to building a driverless-vehicle business differs from that of GM, which is focused on deploying its autonomous Chevrolet Bolt in a robot-taxi service in 2019. Ford is focused on offering services to commercial customers who need to move goods or people around cities.

Ford said it is starting a service that works with health-care providers to shuttle non-emergency patients who don't or can't drive themselves. Its Chariot van service contracts with employers in five cities to shuttle workers to and from their jobs. By 2021, Ford plans to introduce driverless vehicles to handle some rides.

On Wednesday, Ford finance chief Bob Shanks said such services would generate a profit within five years. Ford said the mobility business lost about $300 million in 2017, and that losses would widen this year.

Write to Mike Colias at Mike.Colias@wsj.com

(END) Dow Jones Newswires

January 26, 2018 02:47 ET (07:47 GMT)