Ford: From a Car Business, to a Debt Business, and Now to a Surveillance Data-Mining Business by Spying on Debtors

Capitalism has seen a shift from more business being about making things and getting people to use them -- such as cars and other products -- into businesses that seek to obtain or extract money by loaning money they own or can liquidate. But is this a sound practice for the business world to shift towards? Not according to the last decade.

The drive for many to build themselves up as financial institutions, and our support of these endeavors, led to a financial crisis. The biggest example of failure is the Lehman Brothers global financial services firm which was taken out in the last bubble popping from the subprime mortgage fiasco. And others like AIG and Goldman Sachs were begging for handouts to be saved from ruin.

But we even saw failures in real-economic businesses like Ford and GM, as they were caught up in trying to become financial institutions themselves as they converted from car-making to loan-making businesses and nearly died out. Unfortunately for the rest of us, these institutions were considered "too big to fail" and the government bailed them out with out tax money in order to prevent an implosion of the economy. They engaged in faulty businesses practices, and we paid the price.

This business model of trying to extract value instead of providing sticking to real-value products lead to the demise of Toys R' Us and Sears. equity firms get involved in ownership of profitable businesses, sell of their assets, get banks to loan them millions, then cash out with bonuses and dividends and let the business default on the debt to fail and fall under.

With those lessons, some aren't learning. Like Ford CEO Jim Hackett. He is celebrated his shift from a car business to a debt-issuance business and into a massive data mining plan in a recent interview on Freakonomics Radio. Ford Credit now accounts for 1/3 of the companies total profits.

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Hackett wants to increase the revenue from non car-making by getting into the data and surveillance-spy money making racket like other tech giants. He wants to use "the leverage he could exert over his debtors to force them to let him spy on them (for example, by doubling down on GM's car radio surveillance), and then cross-referencing this data on the data borrowers are forced to supply in order to buy their cars, and with data-sets from corporate acquisitions like the scooter company Spin."

In the interview, Hackett said:

“We have 100 million people in vehicles today that are sitting in Ford blue-oval vehicles. That’s the case for monetizing opportunity versus an upstart who maybe has, I don’t know, what, they got 120, or 200,000 vehicles in place now. And so just compare the two stacks: Which one would you like to have the data from?"

"The issue in the vehicle, see, is: We already know and have data on our customers. By the way, we protect this securely; they trust us. We know what people make. How do we know that? It’s because they borrow money from us. And when you ask somebody what they make, we know where they work, you know. We know if they’re married. We know how long they’ve lived in their house because these are all on the credit applications. We’ve never ever been challenged on how we use that. And that’s the leverage we got here with the data."

The seducers, dominators and exploiters of the financial world are taking the real-economy producers for a ride (pun intended) by convincing them to shift away from making things people need to extracting value through loans and issuing debt. This positions them at the bottom of pyramid scheme, hoping to capitalize on a failed business model that is about to crack. They empty their pockets as the con-artists at the top suck it up and walk away with all the money in the end.

Ford's move to amplify the profit seeking with a surveillance business is not a good strategy. The world's biggest debt issuers are coming under scrutiny again, and so too are the new kids on the block, the surveillance businesses. Massive regulation is is being talked about as another 2008-like financial crisis is looming around the corner.

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References:

• Ford CEO frankly admits that the car of the future is a surveillance device that you pay to spy on you
• Private equity bosses took $200m out of Toys R Us and crashed the company, lifetime employees got $0 in severance
• Can an Industrial Giant Become a Tech Darling? (Ep. 357)

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Thank you for your time and attention. Peace.

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