Ford Motor Co. Chairman Bill Ford didn’t quite go so far as to declare fake news, but coverage of the company’s abandonment of the American sedan market disappointed him.
“The headlines looked like Ford was retreating, and nothing could be further from the truth,” the great-grandson of Henry Ford said on May 10 during Ford’s annual meeting.
The second-largest U.S. automaker announced last month that it’s going to cease investment in sedans for the North American market, a bold move that’s part of CEO Jim Hackett’s plan to cut $25.5 billion in costs by 2022. Eventually, Ford’s only surviving volume car will be the Mustang.
“We’ve been listening to our customers and watching the shifts in the market,” Bill Ford, 61, said during the meeting, held via webcast for the second consecutive year. “We’re placing bets where we think you, the shareholder, can get the best return.”
A lagging stock price has vexed Ford since Alan Mulally retired in mid-2014, with the shares losing more than a third of their value in that span. The board ousted Mulally’s successor Mark Fields last year, replacing him with Hackett, who came out of retirement from having steered office-furniture company Steelcase Inc. through a restructuring and turnaround. The 63-year-old expects his cost reductions to enable Ford to reach an 8 percent profit margin -- a long-held and elusive target -- by 2020.
“I share your frustration and actually the whole management team does,” Bill Ford said in response to a shareholder question on Ford’s “ridiculously low” stock price. “That’s really why Jim kicked off the whole fitness effort. Because we need to get our base business back into fighting shape.”
Ford doesn’t intend to lose car customers by killing off traditional cars, such as the Fusion and Taurus, to focus on more profitable models, such as the F-150 pickup and Lincoln Navigator sport utility vehicle.
“We want to give them what they’re telling us they really want,” Hackett said of Ford’s sedan customers. “We’re simply reinventing the American car.”
Ford rose 0.4% to $11.10 as of 10:24 a.m. in New York. The stock is down 11% this year.
Shareholders rejected a proposal to strip the founding Ford family of its 40% voting control and move to one vote per share. About 36.1% voted in favor of the measure, more than the 35.6% recorded a year ago.
The Ford family controls the automaker through a special class of shares that only they can own. Henry Ford’s great-grandsons, Bill Ford and his cousin Edsel Ford II, are directors on the board.
By Keith Naughton
