Ford shareholders OK new generation of family members for board
Ford Motor Co. shareholders on Thursday approved the appointment of two new Ford family members to the company's board of directors, ushering in a new generation of family involvement for the 118-year-old automaker.
The new directors, approved during a virtual annual shareholder meeting, are Henry Ford III, 40, son of Edsel Ford II, and Alexandra Ford English, 33, daughter of Executive Chairman Bill Ford.
Currently director of investor relations, Ford III has been at the automaker since 2006 and previously served on the company's corporate strategy skill team, as the global marketing manager for Ford's performance division, and in other positions in labor relations, purchasing, marketing and sales, and corporate strategy.
Ford English began her career working in fashion merchandising and now serves as a director of Ford corporate strategy. She previously served as the director of markets and operations for Ford's autonomous vehicles division.
She joined the AV team in 2017 and became a founding member of the division in 2018. She also represents Ford on the board of electric vehicle maker Rivian Automotive LLC, in which Ford has an equity interest.
The two younger Fords — the fifth generation of Ford family members represented in the boardroom, and great-great-grandchildren of founder Henry Ford — replace Edsel Ford II, who had reached the board's mandatory retirement age after serving for 33 years, and retired Eli Lilly CEO John Lechleiter.
"Few companies have had family involvement for 118 years and our vales, our long-term view and steadfastness throughout the years demonstrates our family's commitment to safeguarding the company's future," said Bill Ford. "This is one of the most transformative moments in our company's history. We welcome Alexandra and Henry's fresh perspectives."
With these elections, Ford's 14-member board now includes four women and two people who identify as members of minority groups.
Meanwhile, shareholders defeated a long-standing proposal that would give each share equal voting power. Under the current two-tiered stock structure, Ford family members have outsize voting power. The proposal was voted down with nearly 64% against it.
In other business, shareholders quizzed executives about Ford's stock price, long a point of concern, and plans to reinstate the dividend after it was suspended in the early days of the coronavirus crisis.
Ford's stock opened Thursday at $11.36 per share and closed at $11.55. A year ago, the stock stood at less than $5 per share.
"I think we agree that we're not happy with the performance of the stock, but I do believe that this last year has shown a very different attitude toward our company and it's been reflected in the stock," said Bill Ford. "We've more than doubled since last year's annual meeting, and we've outperformed the S&P this year. So we're on a bit of a roll." Still, he said, "We have more to do."
On reinstating the dividend, Bill Ford said it would happen "as soon as possible," though he noted the company continues to battle a global shortage of semiconductor chips.
“You have our words that it’s very, very high on our to-do list, but we want to make sure when we do it that it’s the right time," he said.
Shareholders also heard from Jim Farley about the plan for the business he implemented upon stepping up as CEO in October. He said the company is undergoing a transformation of its business model: "What we're doing is moving from a traditional buy-sell OEM business model, where Ford Motor Company largely delegates the customer relationship to others, to a new ethos where the sale is just the start of a lifelong, always-on relationship."
Farley has articulated a vision for the company under which the relationship with the customer changes from a one-time transaction to a continual one in which customers pay for data-driven services and features, delivered via regular over-the-air software updates.
Farley also laid out the automaker's strategy on electric vehicles, which is to electrify Ford's most popular and iconic models, including the forthcoming electric F-150 Lightning, which will be unveiled next week the day after President Joe Biden plans to visit the Dearborn plant where the truck will be built.
Farley also answered questions about Ford's plans to launch a self-driving vehicle service in 2022. "As we get closer to standing up this business, we’ll provide a lot more details on our go-to-market strategy, but the good thing is, Ford’s investment in Argo is really paying off," he said of the autonomous driving technology company in which Ford has a stake.
There were queries, too, about Ford's environmental goals, and how the automaker is navigating the semiconductor shortage.
Ford has set a goal of achieving carbon neutrality by 2050. Bill Ford said the company will accelerate that timeline if possible, but "we don't want to commit to something until we know how we can do it."
Last month, executives said they expect the company this year to take about a $2.5 billion earnings hit and to lose about 1.1 million units of planned vehicle production due to the semiconductor issue.
Farley said the crisis has prompted the automaker to rethink some of its supply chain strategies.
“The things that we’re looking at to change longer-term, not only are we redesigning a lot of our components to work with chips that are more accessible," he said, "but we think we need to look at buffer stocks, actual direct contracts with some of the foundries, and we think that’s going to be a really critical approach to our supply chain as we get more electronic components.”