Ex-Ford CEO Nasser Predicted Growth in Automotive Services

History hasn't been kind to the controversial tenure of Jac Nasser as president and CEO of Ford from 1998 to 2001, but in at least one way, Nasser might have been ahead of his time.

Nasser provoked a lot of head-shaking a decade or so ago, when he famously declared that Ford wasn't in the car business, it was in the service business. It turned out, of course, that Ford was in the car business, after all, and Nasser ultimately was forced out by Chairman Bill Ford Jr.

But part of what Nasser was driving at a decade ago was that customers were beginning to spend more money on related services, especially those that could be tied to the Internet, and in Nasser's view, Ford should be doing more to capture those revenues.

MIT Professor Daniel Roos said last week that wasn't a bad idea, even if the execution turned out badly back then.

Roos noted in a presentation at Columbia University in New York that it's a growing trend in today's auto industry for the car companies to provide additional services like information and entertainment.

For instance, Ford today is making a success of its Sync system, which was co-developed with Microsoft. Ford makes money by selling the Sync system, either as an option on less-expensive cars, or as standard equipment on a growing list of more upscale models.

Sync provides an interface between the car and the driver's own portable electronic devices, like cell phones, PDAs and MP3 players. The car's occupants can use the car's knobs and switches, or even voice activation to control the devices, and the audio from the devices plays over the car's speakers.

Ford is also adding new features, like the ability to download turn-by-turn directions to your cell phone, without the need to buy a much more expensive navigation system. The Ford system can also automatically provide emergency notification if you get in an accident, like the OnStar system from General Motors, but unlike OnStar, there's no annual subscription - although it's up to the customer to keep their cell phone paid up, which presumably they would be doing anyway.

GM and other car companies are also chasing revenues from information, entertainment and "concierge" services on every front.

Meanwhile, Nasser is slated to become chairman of BHP Billiton, an oil and mining conglomerate based in Australia, when the incumbent retires next year.

Graphic: Daniel Roos, MIT