Ford's Board Turns Up Heat on CEO
MSN / The Wall Street Journal - Christina Rogers and Joann S. Lublin - 5 hours ago
Ford Motor Co.’s board of directors is extending its scheduled meetings this week so it can press Chief Executive Mark Fields to clarify his strategy as the company’s stock price languishes and its U.S. market share recedes, according to people familiar with the situation.
Company directors, slated to gather this week ahead of the annual shareholders meeting, scheduled an additional day of meetings to address growing uncertainty about the auto maker’s course, these people said. Ford has been solidly profitable since Mr. Fields became CEO in July 2014, but shares have fallen by about a third in that period.
“We do not share details or discussions from our board meetings for competitive reasons,” a Ford spokesman said. “We also are unable to comment on rumors or speculation.”
Ford shares traded at $11.17 Tuesday afternoon.
Founded in 1903 by one of the industry’s most iconic figures, Henry Ford, the auto maker was dealt a blow in early April when its market capitalization fell below electric-car startup Tesla Inc.
Tesla is valued at $52.1 billion, or 15% higher than Ford’s, despite the Silicon Valley electric-car company’s financial losses. Tesla sells a fraction of the volume delivered by Detroit’s auto companies, but is seen as having a lead in electric vehicles and self-driving cars.
When asked about Tesla’s surge during an earnings call last month, Mr. Fields said Ford needs to do a better job quantifying revenue and profit-growth potential of its technology bets. “We’ve talked about the investments, and we’ll do that going forward,” he said.
While Chairman Bill Ford and other directors support Mr. Fields, they are urging him to heighten his focus on growth opportunities, the people said.
Mr. Fields, a 28-year veteran of Ford, took the helm after his predecessor, Alan Mulally, restructured the company by selling off brands and simplifying operations. Mr. Mulally, currently a member of Alphabet Inc.’s board, oversaw an extensive succession race that included members of Mr. Fields’s current management team. He also helped the No. 2 U.S. auto maker avoid bankruptcy, unlike its Detroit rivals.
Mr. Fields has focused on accelerating growth in Asia, jump-starting the company’s Lincoln brand and placing bets on future technologies.
Ford is facing pressure as the U.S. auto market is leveling off after seven consecutive years of growth. The auto maker’s profits have been dented by falling sales and vehicle-recall costs.
The company also is shouldering higher costs as Mr. Fields seeks to venture beyond its core business of building and selling cars. He is pushing into new areas such as ride-sharing and autonomous vehicles and placing bets on new initiatives that could reduce exposure to the auto industry’s boom-bust cycles.
Ford’s closest rival, General Motors Co., also is investing in technology and is far ahead on electric cars. Ford doesn’t plan to launch a long-range battery-powered vehicle until 2020.
At the same time, Silicon Valley firms including Alphabet, Apple Inc., Intel Corp. and a number of startups are acquiring auto suppliers and spending billions on vehicle testing in a bid to unseat Detroit.
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Ford's Board Said to Question CEO on Strategy as Shares Lag
Bloomberg - by Keith Naughton - May 9, 2017...updated
Ford Motor Co.’s board of directors is turning up the pressure on Chief Executive Officer Mark Fields to better explain the company’s fading fortunes and his plan to turn things around, according to a person familiar with the discussions.
The directors scheduled extra time in their meetings this week in advance of Thursday’s annual shareholders meeting so they could question Fields on his strategy as Ford’s stock continues to stall, said the person, who asked not to be identified revealing internal deliberations. The shares have fallen 35 percent since Fields became CEO July 1, 2014.
Investors have been indifferent to Fields’ plan to pour billions into new technologies like driverless cars and robo-taxis to take on upstarts like Uber Technologies Inc. and Waymo, Alphabet Inc.’s self-driving spinoff. Ford’s traditional automotive business has struggled more than crosstown rival General Motors Co. as the U.S. auto market declines following seven years of growth. Ford’s first quarter adjusted earnings fell 42 percent, while GM appears on pace for another record annual profit.
“This is the first public sign that the board is becoming impatient,” said David Whiston, an analyst with Morningstar Inc. in Chicago. “It’s likely proof that the board is frustrated with the stock price languishing for the past several years. It may be a grilling session for Mark.”...
...Fields has defended his strategy of trying to transform Ford into a mobility company that will field robot taxis in 2021 and develop ride sharing services that are essential to the 114-year-old company’s survival.
“We’re having one foot in today and one foot in tomorrow,” Fields said on Bloomberg Television April 27 of his dual strategy to invest in the autonomous future while defending Ford’s turf in the car and truck market.
That dual strategy is proving difficult to pull off, said Michelle Krebs, a senior analyst with Cox Automotive.
“They’re in a tough position because they have to focus on selling products today, making money, paying dividends,” Krebs said. “And yet they’ve got to position themselves for the future and there’s not going to be a payback on that anytime soon.”
A Ford spokesman declined to comment on the board meeting.
“We do not share details or discussions from our board meetings for competitive reasons,” Mike Moran, the spokesman, said in an emailed statement. “We also are unable to comment on rumors or speculation.”
The Wall Street Journal reported earlier the board’s plan to question Fields.
Ford’s shares closed Tuesday at $11.16 in New York, up 0.3 percent.