Ford Hires New Chief for Smart Mobility Unit

Ford Motor Co. has hired a 3M Co. executive to lead an effort to wade into various mobility ventures, the latest company outsider hired under Chief Executive Mark Fields's effort to shake up the 113-year-old auto maker's reliance on its core car business.

Raj Rao, who has experience in e-commerce, the fitness industry and personal connectivity, was named chief executive for the company's Smart Mobility LLC unit. Mr. Rao will report to division chairman Jim Hackett, who was hired earlier this year to lead the newly formed Smart Mobility. Messrs Rao and Hackett join executives Mr. Fields recruited to run a strategy department and data operations.

In a statement, Mr. Rao said he wants to help "Ford change the way the world moves." He joins the company as U.S. auto sales continue to run at all-time highs and Detroit auto makers enjoy near-record earnings.

Mr. Fields is using profits to add layers of new managers and to create new structures within Ford to help it catch up with Silicon Valley companies that have lapped Detroit in electrification, testing of autonomous vehicles or ride-sharing solutions. It is racing General Motors Co. and other established auto makers to catch up with efforts at Uber Technologies Inc., Tesla Motors Inc., Google Inc. and a group of smaller startups and auto suppliers.

Recently, Ford has announced new partnerships and investments or purchases of smaller firms devoted to developing new services, including a San Francisco van-shuttle company, a bike-sharing service and a laser-sensor maker. Those investments and the company's attempts to get autonomous test vehicles on roads early next decade could crimp short-term earnings.

Mr. Fields projects 20% earnings margins for the Smart Mobility unit, but hasn't specified a timetable. Profits would roughly double what Ford's margins are in North American operations, which is its most profitable unit.

Mr. Fields' strategy is a departure from his predecessor Alan Mulally. Mr. Mulally employed a back-to-basics approach, selling off units acquired prior to his 2006 arrival so the company could focusing on car, truck and sport-utility development primarily for the Ford brand.

Ford dove into various services businesses several years ago under former CEO Jac Nasser, but backed away after losses started to accumulate in the core auto-making unit. Mr. Fields has said Ford needs to keep one foot in today and another foot in the future.

Despite a stream of news related to Ford's mobility and future-vehicle, Ford's stock price has declined during Mr. Fields' tenure and was flat Thursday at $12.09.

Write to John D. Stoll at [e-mail] and Christina Rogers at [e-mail]

(END) Dow Jones Newswires

September 29, 2016 12:15 ET (16:15 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.