Comments on: Kerkorian Could Force Ford Family To Cede Voting Rights

By: craigefa

craigefa — Mon, 09 Jun 2008 18:49:17 +0000

Please tell me there is something in this story that could force William Clay Ford to cede control of the Lions.

By: relton

relton — Mon, 09 Jun 2008 14:36:01 +0000

The Ford family’s ability to control 40% of a publicly traded company with only 3% of the stock is being tried in court as we speak. If the family loses, well, there will be some changes.

Bob

By: Martin Schwoerer

Martin Schwoerer — Sun, 08 Jun 2008 21:40:35 +0000

He’s a nonagenarian, not an octogenarian — born in 1917.

By: guyincognito

guyincognito — Sun, 08 Jun 2008 17:04:12 +0000

The Ford family already gave up its control over the company. When they agreed to the mortgage up to the eyeballs secured loan, their ability to control the company was as good as gone. Now they just have to decide who they’d rather formally give control to, Captain Kirk or Citigroup, Goldman Sachs, and JP Morgan.

By: ihatetrees

ihatetrees — Sun, 08 Jun 2008 16:55:06 +0000

Under Mulally, I was somewhat optimistic about Ford’s chances compared to the other big 2.8.

But I’ve recently become aware the Ford family history of craptastic micromanaging – and my faith in their survival has cratered to near GM/Chryslerberus levels.

By: John Horner

John Horner — Sun, 08 Jun 2008 16:27:08 +0000

“Why would the Fords want to give up control?”

By negotiations, that’s how. Kerkorian could, for example, say he is willing to put another $5B into newly issued Ford stock. Up until now, Kirk has been buying Ford Common stock on the open market, which means not a penny of his investment has shown up in the Ford treasury; he has simply been buying out other investors. For FoMoCo to actually see the money it would have to go directly to the company. A buyer of newly issued stock can demand anything in a negotiation and if the company wants the money, they have to agree. Kirk could demand that he wants to buy the “Class B” shares just like the family members (and the Ford Foundation) hold by right of inheritance. Or, he could buy Common stock but demand that the voting rights between the Common and Class B shares be leveled. At the most recent annual meeting many outside investors pushed to have Ford stock restructured into a one-share, one-vote system … but of course the family was able to shoot that down this time. The poor babies are already suffering the lack of dividend payments.

By: Drew Frink

Drew Frink — Sun, 08 Jun 2008 16:09:00 +0000

Scottie: Wonder if they could all file chapter 11 and regroup as one company to form AMC (All Makes Combined). It might work.

Read up on British Leyland to see how well that plan worked for the Brits. A related good read is “Whatever Happened to the British Motorcycle Industry” by Bert Hopwood. Short answer — the entire industry failed…

By: yankinwaoz

yankinwaoz — Sun, 08 Jun 2008 15:12:18 +0000

Did it ever occur to the Fords that their lopsided share/vote arrangement is seriously suppressing the value of the common shares, and their own holdings? That is, the would all be much richer if they gave it up. They could cry all the way to the bank.

By: mel23

mel23 — Sun, 08 Jun 2008 14:25:05 +0000

Other than proving malfeasance or some such by the Ford Family, I assume there’s no legal process that would force them to give up some control provided under the current setup. So, I’m trying to figure how this might work. Why would the Fords want to give up control? If they thought that others had better ideas about how to vote the shares, they could just accept the advice of the others and keep control. The scenario described by the article is that Ford would be out of money and unable to get any/enough on acceptable terms from other sources such that Kerkorian’s offer of funds for control would be the Ford’s best alternative.

If I understand this right, it would say that close to nobody else thought Ford was a safe/wise investment. So why would Krekorian? I can imagine that the Ford’s giving up some control might give the stock a bump for a long enough period for Kerkorian to dump it and exit. Not real appealing from where I sit. But this guy’s got more than I do, so he’s worth paying attention to. When the GM board proved insistent on keeping their heads where they shouldn’t have been, Kerkorian bailed, and that decision has proven wise.

Any thoughts?

By: Scottie

Scottie — Sun, 08 Jun 2008 13:50:12 +0000

Wonder if they could all file chapter 11 and regroup as one company to form AMC (All Makes Combined). It might work.