Ford Motor Co.’s recent financial results affirm its turnaround is on track, and the automaker hopes to continue that growth by investing further in emerging markets such as China, chairman and chief executive Bill Ford reportedly said on Thursday.
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According to the Associated Press (AP), Ford discussed the carmaker’s progress and outlook at its 49th annual meeting – about 170 shareholders attended the subdued gathering in Louisville, Kentucky, a state where the company employs 10,000 and began producing vehicles 91 years ago.
Bill Ford reportedly was mostly upbeat in his remarks, citing the vehicle maker’s $US1.9 billion first-quarter profit as evidence the restructuring plan started a little more than two years ago was working.
AP noted that the January-March period marked the first time since 2000 that the company’s automotive operations earned more than its financial arm – Ford’s profit beat the $1.3 billion that larger rival General Motors Corp. earned in the quarter.
“Overall, we’re very pleased with our progress so far, but we know our job is far from over,” Bill Ford reportedly said, adding: “As you know, this industry remains fiercely competitive worldwide.”
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By GlobalDataAccording to AP, he said Ford expects soon to accelerate its expansion in China, where some analysts have criticised the company for lagging behind competitors.
AP noted that the carmaker said in October, in conjunction with a Chinese tour by Bill Ford, that it planned a $1.5 billion expansion of its China operations to boost car production capacity to 150,000 a year from 20,000 – that plan would entail expanding a factory in the western city of Chongqing as well as building a second car plant and a new engine plant, Ford said at the time.
The second biggest US vehicle maker was a relatively late arrival in China, beginning car production in 1997, and is trying to catch up with US, German and Japanese rivals, AP added.
“We have plans in place to be much more aggressive in driving that growth, including expansions of our manufacturing capacity that will benefit us throughout the region,” Bill Ford reportedly said without offering specifics.
AP noted that Ford executives typically meet with reporters after annual meetings but the company cancelled a question-and-answer session for what it said were scheduling issues.
Associated Press said shareholders re-elected the board of directors and sided with management by voting down five of five shareholder-presented proposals that dealt with issues such as identifying in the proxy all executive officers whose base salary is $250,000 or more and requiring the company by August to release 10-year projections for annual greenhouse gas emissions from vehicles.
Bill Ford also was questioned about the company’s declining market share, according to AP which, citing Autodata, said Ford’s US sales to the end of April were down 2.7% from a year ago while its market share was down a little more than 1% to 19%.
Analysts reportedly say that trend is likely to be difficult to reverse given increasing competition and improving quality from foreign brands.
AP said Bill Ford responded that the company was selling a more profitable mix of vehicles and, for one thing, is backing off from high volume but low margin fleet sales.
According to Associated Press, shareholder activist Evelyn. Davis, who owns a significant amount of stock in dozens of companies, including Ford, and is a frequent attendee at annual meetings, took Ford to task for its hefty legal expenses.
The company reportedly disclosed it spent $440 million in legal fees last year and, of that, $270 million was spent on lawyers outside the company – Ford has roughly 260 lawyers on its internal legal staff.
