Ford Announces Plans To Self-Destruct Starting In 2021

Tyler Durden's picture

Ford CEO, Mark Fields, sat down with Bloomberg to discuss plans to introduce a completely autonomous car by 2021.  The only real problem we see with that plan is that it pretty much ensures their own demise.  That said, they're pretty much doomed anyway so might as well go for it.  

The company said it plans to have a fully autonomous vehicle -- no steering wheel, no gas or brake pedals -- available by 2021 for ride-hailing services.

 

“We see the autonomous car changing the way the world moves once again,” Chief Executive Officer Mark Fields said today at Ford’s research lab in Palo Alto, California. “They address a whole host of safety, social and environmental issues.”

 

Like Alphabet Inc.’s Google, Ford will skip the interim steps of driver-assisted technology as a way to evolve toward full autonomy. Its plan to deploy self-driving cars in ride-hailing and ride-sharing fleets is similar to what General Motors Co. aims to do with Lyft Inc. Ford’s 2021 scheduled start matches BMW’s ambitious timeframe.

 

“We believe in our plan that taking the driver out of the loop is really important,” Fields said in an interview with Bloomberg Television. The automaker couldn’t find a sensible way through the “no-man’s land” -- determining exactly when a robotic car should to try to re-engage a human driver in an emergency.

So what do we mean when we say an autonomous car pretty much ensures Ford's demise?  To be clear, we're not specifically targeting Ford...the whole auto industry is in serious trouble when truly autonomous driving arrives.  Below is a little math to help illustrate the point. 

Right now there are roughly 250mm light-duty passenger cars on the road in the U.S. (that's about 1 car per driving age person, btw, which is fairly astounding by itself).  American's travel roughly 3 trillion miles per year in aggregate which which means that each car travels an average of 12k miles per year.  Now if you assume the average rate of travel is 45 miles per hour then you'll find that each car is implied to be on the road for an average of about 45 minutes per day.  That's a capacity utilization of about 3% (see table below for quick math).

Capacity Utilization

 

A 3% capacity utilization ratio is, needless to say, fairly terrible.  We don't imagine too many CFOs would model capital allocation decisions based on a 3% capacity utilization for fixed assets.  That said, individuals are forced to underwrite car purchases to a 3% capacity utilization because they have no choice.  People have to get to work and 100% reliance on public transit options as just not feasible for most people in this country. 

That is, until the arrival of completely autonomous vehicles.  The problem with mass transit is that people still need a car to get back and forth to the train station or bus stop.  The problem with Ubers/Taxis is that they're expensive for daily use due primariliy to the labor overhead that's built into your per mile rate.  But fully autonous vehicles solve both those problems.  Now, people will have the option of a vehicle at their beck and call without having to fund the upfront capital cost of a purchase and/or the per unit human capital costs inherent in taking an Uber.  In other words, the per mile rental rate of a fully autonomous car should be competed down to a level that provides an adequate return solely on the cost of the vehicle...no wages, no benefits, none of the typical hassles associated with employing people.  Or, said another way, taking an Uber is going to get really freaking cheap.

But the best part is that capacity utilization with fully autonomous cars can skyrocket driving per unit costs even lower for passengers.  For example, when you drive to work right now your car sits there all day until you drive home.  In the autonomous car world, that car will drive you to work then go pick up multiple other poeple to do the same thing.  Now, if capacity utilization doubles from just 3% to 6% all of sudden half the number of cars are required in the US which means annual SAAR goes from ~17mm to ~8.5mm...which means Ford and GM likely find themselves in another bailout situation.

Normalized SAAR

 

So goodluck with that fully autonomous car.  We wish you the best.

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So Close's picture

Think of all the resources this will free up.. human and otherwise...

Rainman's picture

Uber drivers, taxi drivers, truck drivers .. moar waiters and bartenders cometh.

FGH's picture

Ford, take your autonomous car and shove it up your automomous ass.

Save_America1st's picture

In the future they will be called "Johnny Cab"

 

https://www.youtube.com/watch?v=rCUYMM6pABw

 

Automatic Choke's picture

I'll believe it when the roads are replaced by rails.

 

zuuma's picture

As long as trans men can pee in these cars, it should be a successful venture.

Pure Evil's picture

Just think, you and a fellow trans traveller can have Golden Showers in the morning on the way to work.

knukles's picture

Guess I better step up and buy that 1966 Ford GT 40 MK1 and 2016 Aston Martin Vulcan gonna be auctioned at Pebble Beach this weekend.

Seriously, car fans ...   What's an Original '66 GT 40 gonna go for?  Vaaa vaaa voom
As pretty a car as ever made. 

Stackers's picture

Welcome to the Johnny Cab !

hell of a day.

nope-1004's picture

Ford should start by making an engine that runs.  The 5.4 3V was a total POS.  Left millions stranded and that's why sales are way down.  Electric EVAP sensors that short open?  LMAO!!  Gas tank that collapses due to air intake manifold sucking it into a shriveled, crushed plastic corpse.  Oh and then don't try to start the fucking thing after you've unknowingly collapses your gas tank inward..... total vapor lock.

Way to go Ford!!!  Stupid asses.....

MalteseFalcon's picture

So who will be picking up Ford's pension liability?

Should Hitlery step up, so she can lock in the rust belt?

greenskeeper carl's picture

I fucking hate ford, I will never own another one. My wife's escape is only like 5 years old, and has one of those no gas cap fill necks. You know, because think of how big a hassle it is to unscrew one of those and screw it back on when you are done. Think of those extra 30 seconds you'll have each time you fill up now... Anyway, to save us all 15-30 seconds per fuel stop, the thing comes with failure prone parts that fail easily and are costly to replace. To keep her check engine light off, I have ot hold the gas nozzle halfway out and squirt some fuel all over the gasket on the inside of the thing, and the whole hinge/spring mechanism, or I get 'fuel return leak large' engine codes and 'check fuel fill nozzle' all the time. So fucking stupid, all of the headaches we've had with that thing. Fuck ford.

Bay Area Guy's picture

Since the warranty is probably what, three years. Ford is probably happy with the design since they can charge people to fix it once the car's out of warranty.

I would never buy an American car.  GM and Chrysler I wouldn't buy just out of anger that they got bailed out, but the fact that their cars are total POS's is certainly way up there.  As for Ford, my Dad had a Mercury something or other back in the 90's and that thing was in the shop more often than it was on the road.  I swore then I would never buy a Ford branded product.

Déjà view's picture

Automatically drives to lien holder when payment is missed...

OverTheHedge's picture

Ford=shit-sticker.

A car with a shit sticker on the grill.

Zarbo's picture

Had a Ford Escape 4WD.  Was okay until paid off.  Then:$1300 for the sun roof replacement due to snapped cable (all one unit) not repairable, $700 for alternator (all one unit with voltage regulator), Total of $2000 for brake replacement (three times on the front) because the transmisison "coasts" into a decrease in speed (disc brake rotor not machinable/reusable).  So, for a $25k vehicle I paid about 17% of purchas price over 5 years.  POS.  I was going to buy body wrap with lemons, but someone rear-ended me and totaled the vehicle (unibody not fixable at current shop rates. 

Bought a Honda CRV (love it) and drove it to the Ford dealer to tell them I was done ... remove my records, no more email or SPAM.

 

P.S. A friend has the Mazda version of the vehicle and has no problems.  Hmmmm.

JRobby's picture

Because the Mazda is named "Tribute" that is the reason it does not break as often.

monk27's picture

Stupid is what stupid does... Well, more power to them, if you'll ask me ! I cannot stand that arrogant self-righteous company and their POS cars, so I hope they'll have a slow and painful suicide death... 

mvsjcl's picture

I won't get into one. Ever.

logicalman's picture

If someone came up with an autonomous hairdresser, would you stick your head in the box and press the 'go' button, or are you too fond of your ear lobes?

WTF!

It's tough living in a lunatic asylum.

 

Stuck on Zero's picture

3% capacity utilization is not so bad. Some common items have far worse utilization factors: fire suppresion systems, ejection seats, life vests, etc. In fact, I'd wager that the average male uses his penis for sex less than 3% of the time.

Also, are people forgetting that the 3% utilization factor goes to 100% at rush hour?  When you have to wait 2 hours for your roboUber most people will want their own car.

Gaius Frakkin' Baltar's picture

Peak economics...

The value of owning and controling your own car can't be explained in economic terms.

logicalman's picture

I don't think, if you own a newer model vehicle, you either own it or control it.

Michael Hastings springs immediately to mind, when thinking about the control aspect.

Stepping out of line when the revenue collectorrs, I mean cops, are out there plying their trade canget your vehicle impounded/confiscated pretty easily.

40 years ago, I would have agreed with you.

 

monk27's picture

It's more like peak intelligence. Meaning, it's only downhill from here on...

any_mouse's picture

I have a van. Bed inside. Refrigerator. Solar system. 100% utilization. And it has always stayed where I parked it. Available for my use 100% of the time.

You are at work. Child gets sick at school. Run out to the parking lot and...

Just because it is only driven 3% is not the point of ownership. When you need it, it is there.

Do you get the idea someone does not want the average person to "own" anything?

Shelter in place. No choice because the robo car is under remote lockdown. Now accomplished with a button. No need for mass media public notifications.

Control of movement. Control of a population.

You can bet the .01% and their politicians will continue to have drivers and vehices available 100% of the time. And firearms, unavailable to citizens, for protection.

Theosebes Goodfellow's picture

~"The company said it plans to have a fully autonomous vehicle -- no steering wheel, no gas or brake pedals -- available by 2021 for ride-hailing services."~  

Imagine the automobile-loving public, whose sense of empowerment is literately tied to their cars, surrendering that power to any corporation for whatever reason... nope, I can't do it either. What are these social Marxists thinking? Are they really that out of touch with the human race? This is not about a "green planet", or "passenger safety", no, it is, just like anymouse said, about control.

Just for one second imagine yourself climbing into one of Ford's vehicles, (because you won't own it), and it detects you are carrying concealed. It automatically locks you in and drives you directly to a police station while alerting authorities that one of their units is transporting an armed "person of interest", (which carrying concealed would certainly make you). Dream on, Ford, (you soon-to-be-bankrupt facsict bastards), dream on.

Oh yeah, way to go with the aluminum beercan pickup bed, asshats.

Citxmech's picture

Will it go faster than the speed limit?  Pass on the right? Run yellow lights?  Change lanes without signalling? Tailgate?  Park illegally?

No?

Then who's going to want one?

effendi's picture

And for that reason the cops will hate these cars. They won't earn any revenue from fines for speeding or sieze cars from drink drivers and as for parking fines and fees these will also go to near zero. 

Half the population want their own car 100% of the time but the other half will be happy to either save a few grand each year by not owning a car or earning a few grand by letting their car pick up fares when they are at work or at home.

Any auto maker who doesn't get in on the act will lose out to those that do so either way the overall car market will shrink and only the best will survive.

Lets hope the cars have a failsafe against hacking as the risk is somebody will hack them all to start up all at once to go at high speeds and aim for pedestrians if they have no passengers at the time of hacking or at cliffs, houses and concrete walls if they do have passengers. Scarier than a Stephen King novel is possible.

Mr.BlingBling's picture

And kiss goodbye the last vestiges of anonymous travel. Even if you keep your own 'red Barchetta' that's not linked to Skynet, all of the other cars' driving systems will form an unavoidable web of surveillance.

That wouldn't be so concerning if we had some privacy rights, especially ones with severe criminal AND civil penalties if violated.

(And none of that qualified immunity bullshit enjoyed by "public servants.")

johngaltfla's picture

I wonder if they'll name it the Pinto....

gmak's picture

It wil be perfect for the marshmallow generation.

JustPastPeacefield's picture

You WANT 0% usage for fire suppression systems, and other things, like health insurance. And a penis is multifunctional. I pee with it many times a day. And as an objet d'art, it approaches 100%.

JuliaS's picture

Since self driving cars will work equally well all day around, every form of non rush hour traffic will be scheduled for off-peak hours. You'll see no large trucks during the day, no delivery vans leaving distribution depos in wolfpacks. And haven't you read - 6% utilization (a tiny jump) means half as many cars on the road, period. There will be less gridlock. Fewer problems of all kinds. No road rage incidents. No drunk driver crashes (even if the former driver is in the front seat of the self-driving car passed out from intoxication).

And get this - zero liability. Cops will have to find new ways of earning their donuts once all cars obey legal limits and the condition of the driver is irrelevant to its performance on the road.

Government needs you to pay taxes's picture

The trick is to use one's penis across a wide range of applications, including opening beer bottles, measuring (hopefully smaller) objects, getting the attention of your friends, etc.

DaveA's picture

Even with every car on the road during rush hour, four out of five seats are usually empty, so utilization is about 20%. So once or twice during your commute, the autonomous car pulls over, drops you off (to take its other passengers in a different direction), and another car promptly stops and picks you up.

PT's picture

Yes, they are forgetting that 90% of the population want their car between 7:00 and 9:00, and 16:00 and 18:00 M to F, but I suspect govt will have a solution to that.  They will simply legislate staggered opening and closing times for businesses over the full 24 hours in order to fully utilize the cars and if you disagree then you iz a killer of the environment and hate babies.

The author of the article made a good point re: less cars will be needed but forgot that what Ford loses in volume it will make up for by simply jacking up the price.  Plus there are cost savings to be had simply by removing steering wheels and pedals, to be replaced by servos, cameras and computer chips.  The taxi industry will first embrace the new technology - eliminating drivers - and that leaves quite a premium that Ford can charge for the first self-driving cars.  The cars won't necessarily destroy Ford but they will certainly change the business model to something not recognizeable by today's standards.

Some of us enjoy driving.  We are willing to pay extra for large, powerful engines, light weight, stiff chassis and suspensions ... if cars are completely self-driving then we will have zero interest in buying one, apart from the fact that we need to go to work or carry the shopping.  Air conditioning, stereo systems and other passenger comfort has already been optimized.  We'll simply be looking for the cheapest car.

Other people only want a car to get them from A to B.  They don't care about driving.  They care about getting to work and they care about shopping.  I'm afraid these people will outnumber the car enthusiasts and the market will cater purely to their whims.  If they own a self-driving car then the first question they'll ask is, "Why do I have to go to the shops if I can just send my car to pick things up for me?"  Maybe that home-delivery shopping thingy will finally take off in earnest ( but I'd still rather choose my own tomatoes rather than rely on someone else's judgement, if you know what I mean ).

If the self-driving car thing takes off in earnest, then I expect cars to become very expensive and very boring.  Sure, we're supposed to have "free markets" and "competition" that makes things cheaper but cronyism rules the world these days, and if one car can be made to service the needs of eight families then a way will be found to make eight families cough up every last cent for their share of that one car.    Maybe the sticker price of the car will go down but wages will go down even further.  I don't know.  "Manual" cars will be driven off the road by the insurance companies (It's your word against the robot's, so make sure you got all your video dash-cams working) plus, apart from the boutique enthusiasts, the car companies simply won't want to make them. 

Why sell eight cars to eight people when you can sell one car to eight people?  At the moment, the former makes sense.  Volume -->> Profit.  But how well are prices tied to affordability anyway?  Why do sup-prime auto loans exist?  At current prices, you can sell one car to eight people and at least it would be real money, not fake finance bullshit that will never be paid back.  But again, most people prefer to own their own car.  Why would anyone want to buy a car if they have to share it?  (Because they can rent it out and make money on the side - old people can send their car out to be a taxi home from the pub on Friday and Saturday nights and literally make money while they sleep - we have the technology.  Car works on credit card and charges a $500 cleaning fee for anyone that vomits in the car, errr, okay, there may be a few other wrinkles in the system too...)  But what if gubmint provides cars to "those who are too poor to afford a car and need one to get to work"?  Now, suddenly the car companies have a paying customer with bottomless pockets with which to compete against middle-class Joe.  Never forget the cronyism in the system.  Over time, "middle class Joe" wonders why cars are becoming more expensive and less affordable but at least now he qualifies to join in a car-share scheme ...

JuliaS's picture

Self-driving cars are an economic inevitability in the future when no one owns anything and can afford nothing but basic necessities.

It's part of this sharing economy that we supposedly desire, if we don't mention the fact we're forced to accept it by people who own more and more of everything.

Self driving cars will happen because they put part of your freedom - freedom to transport, into the hands of governments and corporations.

Practically the rule of thumb is - look at the Bill Of Rights. If you find any that you still enjoy and technology comes along that will take it away - you bet your ass it'll happen.

Bagbalm's picture

Exactly - we have a winner here - They have to massively stagger working hours and shifts to get much better utilization.

funthea's picture

Yeah, I've driven that GT 40 in Forza... drives like shit. I'm sure its just like the real thing.

Chris Dakota's picture
Chris Dakota (not verified) knukles Aug 17, 2016 10:18 PM

This is UN Agenda 21.

Nobody will be allowed to drive.

The suburbs will die.

You won't be alowed on BLM land.

This is why the Bundy's are in solitary confinement.

Chris Dakota's picture
Chris Dakota (not verified) knukles Aug 17, 2016 10:26 PM

Pax Americana is to give way to Pax  Judaica, the problem is the world is so big and the Jews too few, so the world needs to be made smaller.

Those who planned to replace Pax Americana with Pax Judaica began plotting America’s fall even before the demise of Pax Britannica.

 

U4 eee aaa's picture

There's your niche market right there!

johngaltfla's picture

Awesome. Now the old people down here can just instruct the cars to drive into storefronts instead of doing it themselves. Damned tricky pedals on them thar cars!

U4 eee aaa's picture

hahahahahahahha!

that was good

FireBrander's picture

UMmm....don't most of us ALL go to/from work at the same time? Lol... instead of the 3% capU bing stuck on us, it will be stuck on the manufacturer

JRobby's picture

I recall even "Johnny Cab" got a little "emotional"

The charges for running driver-less cars off the road will be capital in nature and you will be sent to the robot guarded jail or executed.