Ford CEO Says Turnaround Effort Gaining Traction
Ford Motor's turnaround has moved quicker than expected, Executive Chairman Bill Ford Jr. told shareholders at the automaker's annual meeting Thursday, giving unqualified praise to Chief Executive Alan Mulally's leadership.
The shareholder meeting comes after the No. 2 U.S. automaker posted a surprise $100 million first-quarter profit and billionaire investor Kirk Kerkorian disclosed he had taken a nearly 5 percent stake.
Kerkorian's Tracinda holding company got a single mention by Ford during the nearly two-hour meeting in Wilmington, Delaware, though his investment in the company and endorsement of its turnaround plan and management were center stage.
"We welcome Tracinda and thank them for their confidence in our plan," said Bill Ford.
Ford , who hired Mulally from Boeing to take over from him as CEO in 2006, credited Mulally for engineering a faster turnaround for Ford, which has targeted a return to profitability in 2009.
"Most people can see the progress we are making," Bill Ford said. "Each quarter we keep getting stronger and stronger ... and I think it's because of Alan's management skills."
An annual, and largely symbolic, challenge to the Ford founding family's super-voting rights from a dissident shareholder garnered just 27.2 percent support at the annual meeting, slightly less than in 2007.
Ford posted a $2.7 billion net loss in 2007 after a $12.6 billion loss in 2006. It expects a full-year loss this year, but analysts and investors now see it as having pushed ahead of larger rival General Motors in restructuring its loss-making operations in the U.S. market.
The cautious Wall Street optimism on Ford marks a reversal from a year ago, when Ford investors, stung by the 2006 loss chided Bill Ford for the company's slow progress.
This year more investors spoke out in support of Mulally.
Mulally told shareholders Ford has seen signs that its turnaround is gaining traction in the face of a slumping U.S. economy, repeating that it would keep cutting costs as needed.
"There is no doubt the slowing economy in the United States presents a challenge for us," Mulally said. "To help us deliver on our commitments in this very difficult environment, we are taking further cost-reduction actions in North America."
The descendants of Ford founder Henry Ford control 40 percent of the voting power at the company through a separate class of shares established when the company went public in 1956. Each Ford family share carries 16 votes, while an ordinary share represents a single vote.
"I'm opposed to the voting rights of the Ford family as much as I respect the Ford family totally," Irwin Miller of Montreal, said at the meeting, addressing Bill Ford. "It is not democratic. You are like a benevolent despot ... but a benevolent despot is not what I want, I want a democracy."