Shareholders Give Ex-Chief the Blame for Ford Woes

A group of Ford Motor shareholders took turns blaming the company’s executive chairman, William Clay Ford Jr., at the annual meeting Thursday, criticizing every decision he made as the former chief executive except one. That was his decision last September to hire a executive, Alan R. Mulally, as his successor.

Mr. Mulally, 61, a boyish-looking aeronautical engineer who worked for Boeing for 37 years and rose to become its senior vice president, was widely credited with rescuing its commercial airline division from its economic troubles after the events of 9/11.

“Alan knows what it’s like to have your back to the wall, and fight your way out with a well-conceived plan and great execution,” Mr. Ford has said.

Now Ford has its back to the wall, with a $12.7 billion loss in 2006, seven consecutive quarterly losses and a shrinking market share.

Mr. Mulally, alternating between empathy with shareholder concerns and optimism for the company’s “Way Forward” recovery plan, urged the 79 shareholders who gathered for the meeting at the Hotel du Pont to have patience, and promised results “in the months and the years ahead.”

“We are moving quickly and making real progress,” he said. “But it’s going to take time to turn things around.”

The automaker, based in Detroit, has borrowed $23.5 billion to help finance accelerated product development and a reduction in operating costs that includes closing 16 plants and eliminating 44,000 jobs by 2012.

A provision of the loan, which is secured by assets that include the company’s trademark blue oval logo, effectively bars Ford from paying dividends until 2013 or until the loan is paid off, a spokeswoman, Becky Sanch, said.

Shareholders voting by proxy re-elected the 12 current board members with 95.9 percent of the votes cast. All seven shareholder proposals failed, including those calling for a reduction in greenhouse gases, performance-based compensation for executives and health care as a fiduciary duty.

But support increased for a proposal to extinguish the Ford family’s 40 percent voting control through their supervoting shares by recapitalizing all outstanding stock to one vote per share. The proposal won 27.4 percent of the vote this year, up from 22.9 percent in 2006.

After the meeting, Mr. Mulally told reporters that as a global company, Ford was “absolutely supporting free trade,” notwithstanding the increasing market share in North America of its rival Toyota.

He also acknowledged that there would be industry consolidation because of market overcapacity.

When asked if there had been talk of a merger at Ford, Ms. Sanch said, “There has been a lot of speculation. But it’s nothing we’re interested in. We’re focused on turning around our business, not on any type of merger or acquisition.”

She said she knew of no contact from a potential buyer.
By RITA K. FARRELL, NYT