Is The Ford Family Considering Less Control?
Posted by: David Kiley on August 10, 2006
David Cole is one of the best connected people in Detroit. The chairman of the Center for Automotive Research in Ann Arbor, MI, and former director of the Office for the Study of Automotive Transportation at the University of Michigan, he is also one of the best socially connected people in the auto industry.
So it was with some seriousness I take his comment that he would be surprised if the Ford Family didn’t soon come to the conclusion that its 40% control of the company’s voting shares was changed. “I’d be surprised if they didn’t come to the conclusion that it doesn’t serve them or the company any longer,” said Cole, who this week was presiding over CAR’s annual suto industry gathering in Traverse City MI.
“It served the family in the era it was done, but I don’t think it serves them today,” says Cole.
Wall Street analysts like John Murphy of Merrill Lynch believe that the family’s control of the company’s voting shares probably hinders other companies from wanting to form an alliance with Ford that might include an equity stake, as well as recruiting an outside CEO to run the company. It’s been conjectured that the family’s control is what made Renault-Nissan CEO Carlos Ghosn and DaimlerChrysler chairman (when he was still just CEO of Chrysler Group) show no interest in going to Ford when the company reached out to them. Both are widely considered the best CEOs in the industry.
Because of the control the family wields, the Ford board of directors is widely viewed as ineffectual at pushing reform and performance at the company, though it is dotted with some big names like former Treasury Secretary Robert Rubin and retired Wells Fargo chairman Carl Reichardt.
Besides Ford Motor Co. chairman and CEO Bill Ford, his father, William Clay Ford Sr. is on the board, as is Edsel Ford II, the son of Henry Ford II. Elena Ford, a granddaughter of Henry Ford II currently heads product and marketing planning for Ford, Lincoln and Mercury and has professed interest in serving on the board. Bill Ford’s brother-in-law is currently the CEO’s chief of staff. But the family as a whole controls 40% of the voting shares of the company, held in a trust, and voted in a block.






