Mulally upbeat, family stock opposed at meeting
May 10, 2007
By JUSTIN HYDE
FREE PRESS WASHINGTON BUREAU
UPDATED AT 12 P.M.
WILMINGTON, Del. — Ford Motor Co. sped through its annual meeting in under two hours Thursday, but not without a few blistering criticisms for Chairman Bill Ford about his tenure at the company and a sign of support for eliminating the Ford family’s controlling shares.
Seventy-nine shareholders gathered at the Hotel du Pont in Wilmington to vote on re-electing its directors and to vote down eight shareholder proposals. Chief Executive Alan Mulally reiterated the goals of making Ford’s North American business profitable by 2009, and hailed improvements in Ford’s quality.
“We’re not where we need to be, but we’re making progress,” Mulally said. “I think you’ll be pleased in the months and years ahead.”
This year’s batch of shareholder proposals included one calling for the company to abolish the controlling Class B shares held by Ford family members. That plan drew the highest support of all the shareholder resolutions, garnering 27.4% of the vote, about five percentage points more than last year and two points more than in 2005.
Considering that the family controls 40% of shareholder votes, the totals suggest that roughly 45% of regular shareholders may have favored abolishing Class B shares. Institutional investors have grown more opposed in recent years to any system of different share classes in corporations, and the Ford family’s stake could block any proposed merger or takeover of the company.
Chairman Bill Ford has vowed to keep his family involved in the company, and contends shareholders understood the benefits of the family’s Class B ownership when they bought Ford stock. Mulally said he’s had a few meetings with Ford family members, and that the family has been “very supportive” of the turnaround plans.
“They care a lot about Ford, and have done so for a long time,” he said.
Another proposal would allow 10% of common shareholders — down from 30% today — to call special meetings. That effort won 19.7% of the vote. Most of the other shareholder proposals received less than 10% of shares voted, although one requiring Ford to set targets for reducing its greenhouse gas emissions drew 14.1%.
In his first annual meeting as Ford chief executive, Mulally offered an upbeat view of the automaker’s progress in its turnaround plan, saying there were tangible signs of progress, such as better-than-expected first-quarter results and surveys showing Ford’s quality matching Toyota Motor Corp.
“We are moving quickly and making real progress, but it’s going to take time to turn things around,” Mulally said. “You can expect from us what I expect from my team, clearly stated goals and candid assessments of our progress based on facts.”
On Thursday, Ford said in its quarterly report that it now expects to use “about half” of the $17 billion in cash set aside for restructuring costs this year; the company had previously said it would use “more than half” of those funds this year.
The harshest comments from shareholders came from Sam Joanette and Linda Joanette, relatives who speed-read criticisms of Bill Ford’s leadership. Sam Joanette, who also spoke at last year’s meeting, called Bill Ford a “loser” who did not deserve to be chairman due to the automaker's steep losses over the past few years.
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