Ford shareholders on Thursday provided increasing support to a proposal that would strip the company’s founding family of at least some of its authority over the stressed auto maker. A group of Ford Motor shareholders lashed out on the company condemning the company’s executive chairman, William Clay Ford Jr., at the annual meeting on Thursday. The disgruntled faction has criticized every decision he made as the former chief executive leaving aside just one. That was his decision last September to appoint a Boeing executive, Alan R. Mulally, as his successor. Descendants of Henry Ford, who make up 40 percent of the combined voting power of all outstanding family stock, are permitted 16 votes each while other shares get one vote apiece.
The Ford family controls the automaker through their exclusive ownership of the company’s 70.9 million Class B shares, which represent only about 4 percent of total shares outstanding but give the holders disproportionate voting power. Some shareholders expressed their discontent with the company’s leadership, including one of Henry Ford’s descendants; Executive Chairman Bill Ford Jr. According to shareholder John Chevedden, who introduced the resolution, excluding Ford family stock, nearly half of Ford shareholders endorsed the resolution.
Questions about the Ford family’s influence over the company surfaced as the auto maker’s new Chief Executive Alan Mulally is working to put into practice fundamental structuring reforms in the company’s slumping North American operations. The auto firm, which lost $12.6 billion in 2006, drew in Mulally away from Boeing Co. late last summer with a pay package that equaled $28 million for 2006 alone. Mulally was appointed as the CEO of the struggling company who replaced Bill Ford Jr., who had been in the top rank since 2001 and came under intense condemnation from shareholders as the company’s performance worsen. Ford still serves as chairman of the company his great-grandfather founded in 1903.
The second largest automaker of the US has in recent times mortgaged its factories, brand names and other items to acquire a $23.4 billion line of credit to fund the restructuring plan and cover losses. Mulally, a former Boeing executive has pushed for more discipline as Ford undergoes a restructuring that will extensively reduce its work force and shut 16 facilities by 2012.
In the meanwhile, Ford President and Chief Executive Alan Mulally has once again assured shareholders on Thursday that the automaker’s restructuring plan was on track and that it was investing in environmentally friendly technologies amid concerns about climate change. Ford is attempting to wheedle a turnaround from last year’s record $12.6 billion loss and reinvent itself as a leaner and more flexible competitor. Mulally, who is for the first time appearing before company shareholders, said that the firm was taking ‘painful but necessary steps’ to streamline costs and bring more accountability to the company with the goal of building ‘more of the products that people really want and value.’
