Peter Stern, a former vice president at Apple, has been named president of newly formed Ford Integrated Services “to lead customer experiences powered by software and services,” the automaker announced Monday.
He starts immediately and reports to CEO Jim Farley.
Stern previously oversaw areas including Apple TV+, iCloud, Apple News+, Apple Books, Apple Arcade, Apple One and Apple Fitness+.
The plan, Ford said, is for Stern to “build a world-class team to create and market innovative customer experiences by integrating hardware, software and services across Ford Blue, Model e and Ford Pro.
This latest move is part of an overall strategy outlined by Farley to create high-profit services through subscriptions and other digital revenue. Ford’s competitors, including General Motors, are making similar moves.
Immediate priorities for Stern include building out the business tied to Ford’s BlueCruise hands-free driving system, in addition to safety/security services, and oversee physical services, services marketing and Ford Next.
Ford said in its news release Stern’s to-do list looks like this:
- Build out the business tied to Ford’s BlueCruise hands-free highway driving systemand productivity and safety/security services, including those from the Ford ProIntelligence business
- Imagine and deliver exciting new high-value services, and
- Lead services marketing, certain out-of-vehicle customer experiences and Ford Next.
New exec also assumes job duties of Franck Louis-Victor
The news release made no mention of Louis-Victor other than to say the newly hired executive would be assuming those duties.
Ford spokesman T.R. Reid confirmed to the Detroit Free Press that Louis-Victor remained on leave from Ford as of Monday.
Looking ahead with an Apple lens
“This is transformational, because the cornerstone of our Ford+ plan is creating incredible customer services and experiences enabled by great hardware and software,” Farley said in a news release. “There’s simply no one in the world better able than Peter Stern to build this strategically vital part of our business.”
Ford is developing leadership at the forefront of connected, digital platforms that will revolutionize how vehicles function, the way people interact with them and the value those vehicles provide, Ford said. The company has more than 550,000 paid software and services subscribers, with Ford Pro commercial customers todayaccounting for more than 80% of them, Ford said.
Stern said in the news release, “I love creating new services businesses and this is the perfect chance to do just that. … At the same time, the basis for differentiation is shifting from the vehicles alone to the integration of hardware, software and services. I’ll be in the middle of something truly historic and am particularly fortunate to do that at Ford, which has been democratizing automotive technology for 120 years and counting. You couple that with the Ford family’s involvement in the business and commitment to doing the right thing in the long term and this is really where I belong.”
Experience with Time Warner, McKinsey and law
Before joining Apple in 2016, Stern was executive vice president and chief product, people and strategy officer at Time Warner Cable. He began his career at McKinsey & Co.
Stern earned a juris doctor degree from Yale Law School, where he was an editor of the Yale Law Journal and author of the book, “Connecticut Prisoners’ Rights,” Ford said in the release. He subsequently became a member of both the New York and Connecticut bar associations. Stern earned a bachelor’s degree in music and English from Harvard University, Ford said in its release.
Why Peter Stern, and why now
Stern and Farley took media questions about the hire after Ford released the news. In short, strengthening this area of expertise allows the automaker to build shareholder value for investors, increase revenue and profits and improve customer loyalty the way Apple does with its services, both executives said.
While consumers often complain in surveys about technology, and specifically software, Stern said he feels “nothing but optimism” about the opportunity to help create services that change negative perceptions.
Ford created the new position, after studying “very carefully” company divisions, and Farley said this consolidates the software and services part of the business to help it grow more quickly with improved accountability. While it will not report separately during earnings immediately, that is an option in the future, Farley said.
Stern worked with Ford exec Doug Field at Apple, and said “we will be tied at the hip” at Ford. Field, chief advanced product development and technology officer, will lead the vision for electric vehicles while Stern will lead the software and services elements, he said.
“We will be together often and extremely close,” Stern said during the call.
When a reporter asked whether Ford was nickel-and-diming its customers with subscriptions, Stern dismissed the characterization as outdated when involving innovative services. Subscriptions pay for progress. And he knows from working at Apple, he said, that people will pay for good value. These services began slowly and now generate more than $1 billion from Apple customers, he said. “We know the playbook.”
Farley emphasized, however, that Ford is not going to charge for things such as heated seats and heated steering wheels, as some automakers have done. (BMW began charging $18 a month for the heated seats and $10 a month for steering wheels.)
“That’s not the direction we’re going in,” Farley told reporters. Instead, Ford plans to continue using vehicle data to create unique services, he said. “Our industry is littered with bad choices regarding subscription services.”