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Ford Says Hello To Silicon Valley With New Car-Sharing And Autonomous Technology Unit

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In an industry energized by the promise of self-driving cars and similar technologies, automaker Ford is stepping up its game and ramping up its presence in Silicon Valley.

Ford announced Friday that it is forming Ford Smart Mobility, a private subsidiary that will be based in Palo Alto in California and will have offices in Dearborn, Michigan.

This new unit will invest in and build out the carmaker's transportation services - a segment comprising car-sharing - and autonomous technology.

"We're designing, building, growing, and in some cases, investing in mobility services," Ford CEO Mark Fields tells Fortune in a phone interview.

Sitting as the new company's chair is Jim Hackett, former chief executive of furniture firm Steelcase and a member of the Ford board of directors since 2013 before stepping down recently to lead the startup.

Fields lauded Hackett's longstanding experience in workspace design, transforming a traditionally office manufacturer into a firm "that changes the way people work" - the same way Ford intends to change the way people move, added Fields.

The CEO said they will name the CEO of the "operationally oriented" new division in the coming months.

Currently dominating the transportation services segment are tradition taxi companies, private ones such as Uber and Lyft, and smaller startup firms.

Traditional carmakers aim for a piece of the market - General Motors, for instance, buying assets of San Francisco ride-hailing company Sidecar Technologies Inc. two months ago and launching the Maven car-sharing service to allow its users to reserve as well as unlock vehicles using their smartphone.

GM also invested half a billion dollars in ride-sharing company Lyft, with the two eyeing to collaborate on a service allowing customers to reserve a self-driving vehicle.

On Friday, GM also announced that it is acquiring startup Cruise Automation, known for its autonomous vehicle software. The terms of the deal are reportedly in excess of $1 billion.

The future, after all, is fast becoming a threat to the sales models of traditional automakers.

"Elsewhere in the automotive industry, you've got automakers trying to interact with tech companies, but Tesla is, by its very nature, both," says Ed Kim of market researcher AutoPacific, citing the Elon Musk company as the best example of technology and auto integration.

Establishing its Silicon Valley presence is one way to go for these automakers like Ford. In January, it opened a Palo Alto research center devoted to advanced auto technologies, including remotely piloted vehicles. It also won a permit in December to start operating a driverless vehicle in public.

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