Ford tells shareholders turnaround gaining traction
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By David BaileyWILMINGTON, Delaware (Reuters) - Ford Motor Co's turnaround has moved quicker than expected, Executive Chairman Bill Ford Jr. told shareholders at the automaker's annual meeting on 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.Kerkorian, who did not attend the meeting, has in the past shaken the automotive industry with his investments. Most recently before his announced investment in Ford, he made a bid to acquire Chrysler in 2007 and held a nearly 10 percent stake in General Motors Corp for a short stint.Ford, who hired Mulally from Boeing Co 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 Corp in restructuring its loss-making operations in the U.S. market.CAUTIOUS OPTIMISM ON WALL STREETThe 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 and the board was reelected with each director receiving at least 86 percent of the votes cast.Mulally told shareholders the automaker has enough money to execute its plans, which include an aggressive restructuring to cut manufacturing capacity so as to be profitable at the real demand for vehicles and with smaller vehicles becoming a larger percentage of its sales.U.S. auto sales have sagged the first four months of 2008 amid the downturn in the U.S. economy and automakers have said they have also seen an acceleration in the shift toward smaller cars and crossovers from larger SUVs and trucks due to rising gasoline prices.Auto operations outside North America are growing and profitable and the sale of Jaguar and Land Rover will allow Ford to focus on its core plan, Mulally said.Vehicle quality improvements, new technology such as the Sync mobile system and more fuel efficient engines, and a completely new or refreshed North American vehicle lineup by 2010 are among signs the restructuring is gaining traction, he said.Mulally assured shareholders Ford remained committed to cutting costs as needed in the face of a slumping U.S. economy."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."(Editing by Tim Dobbyn, editing by Phil Berlowitz)
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