Ford Family Values

[Cougarpower]

Last Thursday night, as General Motors and Chrysler representatives huddled with Senate leaders trying, in vain, to hammer out a financial-aid deal, a representative for another big automaker sat in an adjacent room. That's just where Ford wanted to be, near enough to have a voice but far enough removed to escape the "cram down" of equity, as Republican Senator Bob Corker of Tennessee called the shareholder dilution that the Senate leaders were crafting. While the White House is now figuring out the best way to rush billions in much-needed bridge loans to the automakers, one thing seems almost certain: Ford Motor Co. will make sure that any deal leaves the Ford family's four-generation grip on the company intact.

 

Alan Mulally, Ford CEO, has made it clear to Congress and the media that unlike GM and Chrysler, Ford is not seeking a bridge loan to get through the current economic crisis. Instead, Ford asked for a backup line of credit that could be used if the economic downturn continues for an extended period. "We are more balanced. We are more efficient. We are more global, and we are more focused. In short, we are on the right path to become a profitable, growing company," Mulally said during his congressional testimony earlier this month. (See TIME's top 10 financial collapses of 2008.)

 

But Ford's go-it-alone strategy reflects more than just confidence in its own viability. Observers around Detroit suggest that the Ford family's continuing control of the company has surely influenced the decision to not seek federal assistance. "Any dilution of equity has to be an issue for the family, and also the loss of dividends," says Brad Coulter, a specialist in bankruptcy and loan workouts with O'Keefe & Associates of Bloomfield Hills, Mich. (Any dividend payment would likely need the approval of a new "car czar," which the White House might appoint if it moves to provide aid.) Alan Baum, an analyst who follows the industry for the Planning Edge in Birmingham, Mich., agrees that the Ford family's control of the auto giant was an issue. "Sure it was," he says. Ford spokesman Oscar Suris denies that Ford's decision not to seek federal assistance was influenced by such concerns.

 

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[theoldwizard]

Nothing that any long term Ford Motor Company observer did not already know.

 

I question the "3%" of Class A stock. I always heard that the Family either owned or controlled (i.e. close personal friends) over 11%, making at least a 51% voting block and any attempt at overriding the board a joke.

[StangBang]

I think that Ford has a distinct advantage to help it survive because Fords are sold all over the world with the same name as the company itself. GM on the other hand has brand names used in each specific market. Chrysler just always seems like they keep trying to put product in export markets but never really make an impact or establish brand loyalty because they are not a global manufacturer like Ford and GM are.

[rmc523]

I thought this was a good thought:

 

Long-term family-owned automakers also appear to have a competitive advantage over their publicly traded counterparts, which are under intense pressure to show positive quarterly results. Some of the world's most stable automakers — Germany's BMW, France's Peugot and Japan's Toyota and Honda — all operate under corporate structures in which the founding family has a significant stake. The companies, which often need years to nurture new products, new technology and new markets, seem to benefit from the longer term outlook that comes with family control.