SOURCE: Automotive NewsFord making progress on restructuring, CEO says Mulally expects more industry consolidation
May 10, 2007 - 10:00 am
WILMINGTON, Del. (Reuters) -- Ford Motor Co. CEO Alan Mulally said today the automaker was making progress in its restructuring, but cautioned company shareholders that the turnaround would take time.
"We are not where we need to be, but we are making very good progress," Mulally told shareholders at the annual meeting.
Ford is attempting to engineer a turnaround from last year's record $12.7 billion loss and reinvent itself as a leaner and more flexible competitor.
Mulally said the company's transformation is "under way."
"You will be pleased with what you see in the month and years ahead," he added.
Mulally, who was hired away from Boeing Co. in September, and Ford Executive Chairman Bill Ford faced questions from shareholders on a number of issues, including the company's poor performance and its plans for introducing fuel-efficient vehicles and reducing greenhouse gas emissions.
Eight shareholder proposals opposed by Ford were voted down at the annual meeting, including the initiative to strip the founding Ford family of most of its voting power by converting Ford Class B stock to common stock.
About 27 percent of votes were cast in favor of that proposal, up from 23 percent last year.
Bill Ford earlier today came under fire from some shareholders who blamed him for the automaker's deep financial problems. He has been chairman since 1999 and was CEO from October 2001 to September 2006.
The Ford family scion was "responsible for the destruction of the company," according to Sam Joanette, a Miami Beach, Fla., investor, who said he lost about $1 million in Ford stock.
Ford responded to criticism by saying the overall auto industry is going through a period of turmoil and he had full confidence in Mulally's abilities to turn around the automaker.
More consolidation expected
Mulally said he expects further consolidation in the auto industry, driven by too much capacity.
"Clearly the world has an overcapacity in the automobile industry," Mulally told reporters on the sidelines of Ford's annual shareholder meeting. "I expect that we'll see consolidation over time, in the form of mergers or acquisitions or equity (stakes)."
Mulally also said Ford may have cut production a bit too much last year as it tried to align production with demand.
"Some people think we went a bit too far on that, so we've increased production a bit and are in constant talks with our dealers," he said.
Mulally also said Ford will consider reinstating a dividend to shareholders as the company progresses with its turnaround effort and tries to restore profitability.