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Ford Connected Services Organization to Operate as Standalone Unit

The group’s primary objective is to keep Ford ahead of the curve in cutting-edge technologies, which are viewed as essential in the quest to attract the so-called Millennial Generation.

Ford Motor Co.’s new connected services organization has been set up as an autonomous division, immune to downsizing efforts but responsible for its own bottom line, says the head of the group.

Doug VanDagens, 50, has been tapped to lead the division, which has a staff of 40, including product-development engineers, wireless and information-technology experts, product managers and finance personnel.

The group’s primary objective is to keep Ford ahead of the curve in cutting-edge technologies, which are viewed as essential in the quest to attract the so-called “Millennial Generation,” the growing population of 14- to 29-year-olds that are expected to represent 38% of the driving population by 2010.

“We’ve created an organization that (will collect) revenue from our services and against that we’ll have our costs,” VanDagens tells Ward’s in an interview. “So we’re running as a business. As revenues materialize, and they’re huge revenues, from our existing services, we can be a self-funding entity not subject to cuts or budget restraints that others are.”

The group does not have an official name yet, although VanDagens says one has been selected and is undergoing review.

With the formation of the division, Ford is hoping to build on recent in-vehicle technological successes such as Sync, which allows hands-free operation of cellular phones, iPods and other MP3 devices.

Sync is based on Microsoft Auto software, to which Ford has exclusive license to until November. After that, Microsoft Corp. will make the software available to all auto makers, such as the Hyundai-Kia Automotive Group, which recently inked a deal to access the technology once Ford’s contract expires.

VanDagens says allowing other auto makers access to the software will be a good thing for the entire automotive industry.

“We’re happy Microsoft has additional customers because Ford doesn’t want to have the burden of paying for the (Sync) platform all on its own,” he says. “So, as more OEMs pick up the platform, it (becomes) more affordable.”

VanDagens points out Ford acquired the rights to the software in 2006.

“Competitors that are getting Sync (will be) working on things we worked on two years ago,” he says.

Ford already has made significant strides advancing the technology with the recent introductions of its Travel Link navigation/information system and 911 Assist and vehicle-health reports.

With 911 Assist, authorities automatically are contacted via cell phone in the event of a serious accident that involves airbag deployment.

Before placing the emergency call, Sync provides a 10-second window that allows a vehicle occupant to cancel the call. A pre-recorded message will play when the call is answered, and a vehicle occupant is then able to communicate directly with the operator, Ford says.

Unlike General Motors Corp.’s OnStar telecommunication system, which also provides emergency assistance, 911 Assist is provided free of charge.

Additionally, consumers can access a dedicated website for vehicle-health reports that are generated from information provided by the vehicle’s major control modules, after which data is sent to Ford through the user’s cell phone. The entire process is free of charge, takes just a few minutes and includes routine checks of more than two dozen vehicle systems.

Both 911 Assist and vehicle-health reports are highly upgradeable, as they utilize technology that is made available by third-party providers, such as cell-phone companies.

With technologies such as OnStar, a driver is connected via the vehicle’s integrated cellular link, posing a potential danger during a catastrophic accident, VanDagens says.

“If you use some of the competitors systems and get in an accident, you have to stay in the car,” he says. “And what if you’re in an accident in the middle of highway and the car is on fire?”

Of particular interest to VanDagens’ group is perfecting the human-machine interface. With the strategy of using its software systems as a conduit between pre-existing technology and consumers, a best-in-class HMI is a must, VanDagens says. He cites Apple Inc.’s iPod as an example of how important it is to provide consumers with a way to easily communicate with technology.

“Why is the iPod successful? It’s not just because it’s an MP3 player, but because it has the best human-machine interface in the business, and that’s what we’re trying to replicate in the car,” VanDagens says.

Consumer Electronics Assn. spokeswoman Jennifer Bemisderfer says Ford is on the right track with its new group.

“It is great news for consumers that auto makers are dedicating more resources to in-vehicle technology,” she says, citing CEA research data that shows consumer spending on in-car consumer electronics grew 21.5% last year to $11.4 billion.

“In-vehicle technology influences consumers’ vehicle-purchase decision and satisfaction,” she says. “This is why it is important for auto makers to stay ahead of the consumer demand related to in-vehicle technology.”

VanDagens has led numerous high-tech endeavors, including stints at Wingcast, a Ford-Qualcomm telematics joint venture, and Compuware Corp.’s Covisint, a 400-employee internet start-up formed in 2000 by a consortium of five auto makers, including Ford, GM and the Renault SA-Nissan Motor Co. Ltd. alliance.

Additionally, the group has the support of Ford’s top management, from CEO Alan Mulally on down, VanDagens says, noting he reports directly to Derrick Kuzak-group vice president-global product development, and Jim Farley, group vice president-marketing and communications.

“Ford is providing my group with the resources and people to lead,” VanDagens says. “When the (new products) launch, the industry is going to (say), ‘Wow, Ford is way ahead.’”

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