Ford Shareholder Meeting Sprited, Plug-In Hybrids Revealed
WILMINGTON, Del., May 11, 2006; Reuters reported that Ford Motor Co shareholders voted down a proposal that would have curbed the founding family controls at an annual meeting marked by contentious debate over fuel economy and the automaker's chief executive.
Pressed by activists to take steps to improve the efficiency of Ford's vehicle line-up, Bill Ford Jr, great-grandson of Henry Ford, said the automaker was considering launching a plug-in hybrid, a potential industry first.
Ford, who has foregone a cash salary since the company ousted former Chief Executive Jacques Nasser in 2001, also repeated his pledge to forgo any new remuneration until Ford's auto unit returns to sustained profitability.
Ford is struggling in North America, its largest market, where it lost $1.6 billion in 2005 and another $457 million in the first quarter. It has announced plans to shutter 14 plants and cut 34,000 jobs, but has faced criticism for not moving fast enough in comparison with the turnaround plans of larger rival General Motors Corp.
Eight shareholder proposals opposed by Ford were voted down at the annual meeting, but two initiatives aimed at the Ford family and Bill Ford's dual role as chairman and chief executive drew about one-in-five votes cast.
"Mr. Ford is a failure," said Sam Joanette, a Miami Beach investor, who said he had lost about $1 million in Ford stock since 1999 and spoke in favor of requiring Ford to step down.
"Mr. Ford knows he is not qualified, that he is in over his head," said Joanette, who said Ford was engaged in a "never-ending restructuring" and unlikely to meet its commitment to return its auto operations to profit by 2008.
Other shareholders spoke in favor of Ford's management, including Frank Kubic of West Virginia, who grew heated in denouncing critics as a bunch of "political monkeys."
Ford did not respond to the criticism, instead telling shareholders that management understood that the market was shifting rapidly because of higher oil prices.
"We are working very hard on this," he said. "We agree gas prices are high and oil is not going to be any more plentiful or easier to find in the future."
Asked about the company's commitment to reducing its reliance on gas-guzzling trucks and sport-utility vehicles, Ford said the company was weighing a plug-in hybrid.
Such cars could be charged from a home outlet and could run up to 30 miles on electricity alone. For longer distances a gasoline engine kicks in, powering the vehicle like hybrids currently offered by Ford and other automakers.
Advocates have called the technology an immediate ways to improve fuel economy and cut greenhouse gas emissions.
In the past, automakers have balked at the additional cost of the extra battery such vehicles require. Ford has also had to support its current hybrid offering, the Escape, with zero-percent financing, indicating weak demand.
But high gas prices have cut deeply into demand for profitable Ford sport-utility vehicles, like the Explorer, and the company's market-leading F-Series pickup truck models are competing in the most heavily discounted part of the market.
Russell Long, the founder of Bluewater Network, said he was encouraged by Ford's statement on plug-ins, if it boosted the overall performance of the company's fleet, now the least efficient in the industry. "This can't just be a license to make a new SUV," he said.
Shareholder gadfly Evelyn Davis made an appearance at the meeting and sharply criticized Ford's plans to produce a reality television show featuring car designers. "This is outrageous that the board wants to spend money on a reality show," she said. "Somebody put the wool over your heads."
Bill Ford joked that "sometimes this meeting feels like" a reality TV show, but he said: "We're going to give it a shot. It's something very different for us."
Shareholders voted down a proposal that would have stripped the founding Ford family of most of its voting power by converting Ford Class B stock to common stock. About 23 percent of votes cast were in favor of that proposal.
Ford's shares have fallen 8.5 percent this year, compared to a gain of nearly 37 percent for GM, which some analysts argue is pushing the pace with its own turnaround effort.
The market capitalization of Ford has dropped by over $45 billion since 2001, when the shares traded above $30 a share.