Mulally: Ford Making Steady Progress

May 10, 2007

Ford Motor Co.’s turnaround is on track, chief executive officer Alan Mulally told the handful of shareholders who bothered to show up in Wilmington, Del., for the company’s annual shareholders meeting.

The slender turnout didn’t prevent a proposal that would have broken the Ford family’s grip on the company. The proposal was supported by 27 percent of the shares voted during the meeting. The strong vote for the proposal suggests the majority of Ford’s non-family shareholders would prefer to end the family grip on the company. It also guarantees it will be voted on again next year.

One of the few shareholders at the meeting ripped chairman William Clay Ford Jr., saying he was a failure and a loser, according to an account provided by the Associated Press.

Ford CEO Alan Mulally, however, tried to put a good face on the company’s manifold problems by saying the company was making steady progress in organizing to meet the challenges.

“As we go forward, you can expect from us what I expect from my team — clearly stated goals and candid assessments of our progress based on facts. Ford Motor Company already has a proud history to gain inspiration from, and many hopeful developments to build on,” he said.

Mulally also noted Ford has several successes last year, despite reporting a $10.5 billion loss. “We had record sales inChina and India in 2006, and continued that strong momentum in the first quarter of this year,” he said. In addition, Ford Europe saw a sales increase of nearly five percent in 2006, and sales continued to rise in the first quarter, including best-ever March sales.

“Meanwhile, consumer surveys shows the quality of our Ford, Lincoln and Mercury products in North America is now equal to Toyota and Nissan. This is the first time since we began tracking their quality against ours in 1981 that we've matched them,” he said. “That's an incredibly important milestone.”

 

Mulally, however, said Ford’s North American sales are under continuing pressure. “But we've made great progress in building products consumers want to buy. Just three years ago, 70 percent of our U.S. retail sales were trucks and SUVs, and 30 percent were cars and crossovers. With the success of new products like Ford Fusion and Edge, today almost 50 percent of our retail sales are cars and crossovers,” he noted.

Ford’s financial results in the first quarter were better than expected, thanks to cost-cutting in North America and greater strength around the world, especially at Ford of Europe and PAG. “We’re not where we need to be, but we are making progress,” he said.

Mulally also said the goal of the company’s ongoing reorganization is to build more of the products “that people want and really value.”

 

“We are moving quickly and making real progress, but it’s going to take time to turn things around. As we go forward, you can expect from us what I expect from my team — clearly stated goals and candid assessments of our progress based on facts,” he said. “Our products also will define us as the company that cares about its customers and their communities.”

“Bill Ford and I share the same vision of building clean, fuel-efficient, environmentally friendly vehicles that protect their passengers and our planet. We believe that a company that acts responsibly and is concerned for the greater good will not only be admired, it will be rewarded with growth and sustained profitability,” he added.

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