With Ford’s bonds newly reduced to junk status, Bill Ford might well have expected some trouble at his company’s AGM. He got it – but at a remarkably token level. And rather unexpectedly, the amount of time devoted to complaint about Ford’s depleted stock price was eclipsed by the amount of time devoted to its substantial contribution to global warming.
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There were a couple of attempts to strip the Ford board and senior execs of power or money. A retired Ford truck-maker from Dearborn opposed the election of the entire 15-man board on the basis that “the stock had lost two thirds of its value and the market share was in a death spiral.” His analysis of the problem was that insufficient was spent on product development and that the $7.5bn engineering and product development had stuck at that level for several years.
Another motion wanted the names of everyone in the corporation who earned more than $500,000 a year so that the high-earners could be held to account for poor performance on their watch.
And there was a motion to consolidate all classes of stock and redistribute them evenly with one vote attached to each. The move was a barely concealed attempt to rub out the B shares which are what create the 40% voting rights for the Ford family. That failed. Bill Ford said it had been that way since 1956 and everyone who had bought stock knew about it when they made the purchase so why change now? Huge applause. In fact there was applause at every occasion that the Ford family involvement in the company was mentioned even when the matter directly related to the very obvious failures of the company to maintain financial progress – which is exactly what you would imagine the shareholders to care most about. A second attempt to curb Ford power was a straightforward suggestion that there should be a committee set up to “oversee conflicts between the Fords and the ordinary shareholders.” That got nowhere either.
Slightly more vigorous but just as ineffective was the Green debate. Someone pointed out that at the present rate of global warming with 85% of glaciers in retreat we could envisage a sea level this century three feet higher than it is now at which point much of Florida would be under water. The thrust of the tactics at the AGM came as an attempt to divert the money that Ford was putting in to political lobbying to generate exemptions from the Corporate Average Fuel Economy regulations and to prevent difficult increases in the fuel economy targets. How much more sense did it make to put that money into hybrid vehicle research instead?
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By GlobalDataBill Ford deflected that by saying that four more hybrids were coming down the track as fast as they could and that if only they could get more batteries out of the battery makers there would be more of them sold to the long queues of people wanting them.
And he had taken the precaution at the start of the meeting to deflect the criticism about the board and his leadership.
“Break-even in the automotive division is our most critical measure this year. I have asked the compensation board to tie my compensation directly to the auto division. I already took no cash from the company but I will now forego any compensation at all until we attain profitability.”
Huge applause for that too. But this time the anti-family contingent was able to join in as well.
Rob Golding
