Google Boosts Driverless Autos Quest as Ex-Ford CEO Joins Board

Jul 16, 2014 12:01 am ET

July 16 (Bloomberg) -- Google Inc., operator of the world’s biggest search engine, named former Ford Motor Co. Chief Executive Officer Alan Mulally to its board, gaining auto expertise in its quest to develop self-driving cars.

Mulally, 68, who was appointed July 9, will serve on Google’s audit committee, the Mountain View, California-based company said in a statement yesterday. He’ll receive an initial grant of $1 million in Google stock, an annual equity award of $350,000 with a $75,000 cash retainer and reimbursement of expenses, Google said in a separate filing.

His appointment to Google’s board is less than two months after the technology company unveiled the latest prototype of its self-driving car, a move which General Motors Co. said could become a “serious competitive threat” to the auto industry. Mulally stepped down from Ford on July 1, six months earlier than expected to make way for successor Mark Fields. He was also considered for the top job at Microsoft Corp., a role that went to Satya Nadella after Steve Ballmer’s retirement.

“This is really an inspired move,” Jeffrey Sonnenfeld, associate dean of the Yale University School of Management, said in an interview. “Mulally has a great deal to bring to Google. He’s an engineer’s engineer who has a great feel for consumer product innovation. This is a way to let us know that there’s no limit to the scope and scale of where Google is going.”

Boosting Technology

Mulally, who came to Ford from Boeing Co. in 2006, engineered a turnaround at the automaker by globalizing new models, cutting costs, boosting technology and overhauling the lineup with fuel-efficient vehicles such as the Fusion sedan, which has looks that evoke Aston Martin’s luxury models. Ford earned $42.3 billion in the last five years after losing $30.1 billion from 2006 to 2008.

“Alan brings a wealth of proven business and technology leadership experience,” Larry Page, Google’s CEO, said in the statement.

Mulally could evolve into a lead director on Google’s board, Sonnenfeld also said. Prior to Mulally’s appointment, Google had 12 board members, according to data compiled by Bloomberg.

“He works very well in teams and groups,” said Sonnenfeld, who has seen the former Ford CEO work with other business leaders. “He brings an ‘aw-shucks’ lack of ego and grandiosity to group problem-solving in a way that’s pretty inspiring.”

Autonomous Vehicles

Google announced May 27 that it plans to deploy at least 100 fully autonomous vehicles that it designed in trials starting this year. The two-seat cars will have a top speed of 25 miles (40 kilometers) per hour and no steering wheel, brake or accelerator pedals. Google had tested its technology in other cars, such as Toyota Motor Corp.’s Prius, for several years.

Other automakers, including Ford, are investing heavily in research and development of autonomous cars, which could help reduce traffic congestion and fatalities as more people migrate to urban centers.

President Barack Obama yesterday championed spending on research on cars that can talk to each other to help manage traffic flow. He took a test-drive in a simulator of a car equipped with such technology at the Turner-Fairbank Highway Research Center in McLean, Virginia.

“Mulally is fantastic on innovation,” Sonnenfeld said. “He’s very good at finding the positive windows for change. He can be a forceful, but always friendly advocate.”

Broader Business

Google is broadening its business beyond its traditional desktop Web-search, which is being challenged by applications on smartphones and tablets, and expanding its software to serve mobile devices from phones and tablets to computerized glasses and cars.

The technology stock rose as high as $595.90 in late trading yesterday after Mulally’s appointment was announced. The Class A shares have risen 5.7 percent this year through yesterday’s close in New York.

Mulally said last month he’ll continue to advise Fields, who was promoted to the CEO role from the post of chief operating officer, and remain in touch with Ford.

Mulally didn’t respond to requests for comment. In Google’s statement, he said: “I am honored to serve on the board of a global iconic company that is dedicated to enhancing our lives.”