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Bill Ford Says Automaker Not Backing Off Of Sedans

May 11, 2018 0 Comments

Last month, Ford Motor Co. announced that it’s going to “cease investment in sedans for the North American market” as part of CEO Jim Hackett’s plan to cut $25.5 billion in spending by 2022, according to Bloomberg.

However, chairman Bill Ford, 61, said the headlines made it look as though the automaker was “retreating,” and said “nothing could be further from the truth.”

“We’ve been listening to our customers and watching the shifts in the market,” Ford said. “We’re placing bets where we think you, the shareholder, can get the best return.”

Lagging stock prices have plagued the automaker since Alan Mulally’s retirement in mid-2014, and its shares have lost over a third of value in that time. In 2017, the board ejected Mark Fields (Mulally’s successor) and replaced him with Hackett, who came out of retirement and had restructured and turned office furniture company Steelcase Inc. around.

Hackett, 63, said he expects his cost reduction to help ford reach an 8 percent profit margin by 2020.

“I share your frustration and actually the whole management team does,” Ford said in response to a shareholder question on Ford’s “ridiculously low” stock prices. “That’s really why Jim kicked off the whole fitness effort. Because we need to get our base business back into fighting shape.”

The automaker has no intention of losing car customers by getting rid of traditional cars to focus on more profitable vehicles.

“We want to give them what they’re telling us they [Ford’s sedan customers] really want,” Hackett said. “We’re simply reinventing the American car.”

As of yesterday morning, Ford was up 0.4 percent ($11.10) in New York. The company’s stock is down 11 percent this year.

Shareholders rejected a proposal to strip the Ford family of its 40 percent voting control and move to one vote per share. Around 36 percent voted in favor of the measure, up from 35.6 percent last year.

The Ford family controls the company through a special class of shares only they can own. Henry Ford’s great-grandsons, Bill Ford and cousin Edsel Ford II, are directors on the board.

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About the Author:

Dave Martinson is a broadcast journalist for DrivingSalesNews. He has a background as a TV News Reporter, Anchor and Producer. He has also worked in Digital Marketing and Human Resources. He received his bachelor’s degree in Communication from Brigham Young University – Idaho. He’s married and originally from the state of Washington. He’s a huge football fan and enjoys the outdoors.