econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 27 May 2017

New Tech Reshaping Old Industries

by Ben Shepherd, Investing Daily

Investing Daily Article of the Week

When the automobile first started motoring down the road, carriage drivers considered them a technological terror. Loud, fast and often navigated with reckless abandon, they scared horses, rattled teamsters and generally frayed nerves. Within a generation, though, there was nary a horse-drawn wagon on the road.


Please share this article - Go to very top of page, right hand side for social media buttons.


As with most new technologies, automobiles eventually become mainstream and “old," requiring a refresh to remain competitive. In this case, old school internal combustion engines are transitioning to newer electric engines and even making becoming self-driving. Ironically, electric cars aren’t a new idea - in 1914 a Detroit Electric Automobile traveled 241 miles on a single charge.

It’s within this context that we address the big management change at Ford Motor (NYSE: F). The iconic automaker announced this morning that embattled Ford CEO Mark Fields would be replaced. Fields has been under fire for months as sales decline. Despite Ford’s investment of $1 billion into a joint venture with Argo AI, Fields also has been criticized for the company’s slow pace of integrating new technologies into automobiles. Since Fields took over as CEO, Ford’s share price has declined roughly 40% thanks to those worries.

Even more telling is the identity of Fields’ replacement. The board has tapped Jim Hackett, who has headed up the automaker’s Smart Mobility unit since early last year, to be the new CEO. Ford Smart Mobility has been working on developing technology for connected (think Uber) and autonomous vehicles, essentially making Ford’s currently “dumb" vehicles “smart."

The fact that Ford’s board selected Hackett to head up the troubled automaker shows they clearly know which way the wind is blowing. I also wouldn’t be surprised if Tesla (NSDQ: TLSA) becomes the highest valued automaker in the U.S., even though traditional automakers have booked quarter after quarter of rising profits. Even if traditional automakers are more consistently profitable than Tesla and even if consumers have been slow to buy into electric automobiles, Wall Street is clearly rewarding those companies it sees as having a technological edge.

It’s not mere hyperbole: the day is coming when we’ll have to evaluate even old line industries in terms of the technology they’re creating and implementing.

Sticking with the potential of self-driving vehicles to reshape industries as an example, think about Waste Management (NYSE: WM). It doesn’t get much more “old school" than picking up and disposing of trash, but as autonomous vehicles become the norm, imagine the cost savings that WM could realize when trash trucks no longer require human operators.

That day will come - it’s a logical consequence of the advancing technology - and WM won’t have any choice but to adopt the technology if it wants to remain competitive.

Don’t be surprised by Ford’s choice for new CEO. We’ll see more companies faced with similarly tough decisions in the days ahead.

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical Investing Post Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted. You can also comment using Facebook directly using he comment block below.




Econintersect Investing








search_box
Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.







Keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government





























 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2017 Econintersect LLC - all rights reserved