Fields Defends Ford's Honor in Tense Shareholders Meeting
As anticipated, Ford CEO Mark Fields was grilled today over his plans to improve the company’s waning fortunes by board members who had scheduled extra time to question him.
Hot topics at the annual meeting centered on why profits are falling, what is Ford doing about the market shift toward SUVs, and how the company’s colossal investments into technology are affecting its present-day financial situation. Ford has poured billions into self-driving vehicles and ride-sharing platforms as its traditional car business loses some ground to General Motors in a slowing U.S. market. Fields spearheaded Ford’s rebranding as a mobility company, but many have suggested this future-focus isn’t healthy for the brand.
Fields stuck to his guns, emphasizing that Ford was heading “aggressively but also prudently” into “the biggest strategic shift in the history of our company.”
That didn’t appease major shareholders, however. After posting a none-too-shabby pretax profit of $10.4 billion in 2016, the automaker anticipates a less impressive $9 billion for 2017 — which it admits is largely due to massive investments in technology.
The company’s stock price has also trended downward since July of 2014, while General Motors’ has remained much more stable. But the assumption was that Ford’s emerging identity as a tech-first mobility brand would energize shares à la Tesla Motors — which holds a higher market value, despite not turning a steady profit.
This has resulted in plenty of bent out of shape investors, some of whom speculated Ford’s virtual shareholders meeting was intentionally set up to avoid face-to-face confrontation. However, the company answered 27 questions this year, compared to last year’s nine. It also said it would eventually answer the “remaining pertinent questions” online. Ford also managed to reach more investors by going digital.
According to Automotive News, 59 individuals were in attendance at last years meeting. This year, Ford said 147 shareholders took part via their computers, with an additional 203 guests — mainly media — logging on.
Still, complaints persisted. Ford shareholder John Chevedden called the event a “horrible retreat into a foxhole for the company,” suggesting upper management was essentially “hiding in Dearborn in the basement.” Other interested parties continued their assault on the brand’s investment choices and financial well-being as the market stagnates — even though Ford was the only domestic automaker to avoid bankruptcy in the last recession.
You have to feel a little sorry for Mark Fields, who seems to have nothing but the company’s long-term success in mind. It would be easy to imagine investors equally angry if Ford simply ignored emerging technologies, provided its share price was the same.
“If things stay the way they are for another 12-to-24 months, Mark [Fields] could be under even more scrutiny,” said David Whiston, an analyst with Morningstar. “Whether that’s fair or unfair, it won’t even matter at that point. The board will just want to see the stock go up.”
One person Fields had in his corner was Executive Chairman Bill Ford Jr. “We’re as frustrated as you are by the stock price,” Ford said at the meeting, stating the company “continues to succeed in the present, even as we build a foundation for greater success in the future.”
[Image: Ford Motor Company]
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- Marvin Im a current owner of a 2012 Golf R 2 Door with 5 grand on the odometer . Fun car to drive ! It's my summer cruiser. 2006 GLI with 33,000 . The R can be money pit if service by the dealership. For both cars I deal with Foreign car specialist , non union shop but they know their stuff !!! From what I gather the newer R's 22,23' too many electronic controls on the screen, plus the 12 is the last of the of the trouble free ones and fun to drive no on screen electronics Maze !
- VoGhost I'm clearly in the minority here, but I think this is a smart move. Apple is getting very powerful, and has slowly been encroaching on the driving experience over the last decade. Companies like GM were on the verge of turning into mere hardware vendors to the Apple brand. "Is that a new car; what did you get?" "I don't remember. But it has the latest Apple OS, which is all I care about." Taking back the driving experience before it was too late might just be GM's smartest move in a while.
- VoGhost Can someone Christian explain to me what this has to do with Jesus and bunnies?
- Del My father bought GM cars in the 60's, but in 1971 he gave me a used Datsun (as they were called back then), and I'm now in my 70's and am happy to say that GM has been absent from my entire adult life. This article makes me gladder than ever.
- TheEndlessEnigma That's right GM, just keep adding to that list of reasons why I will never buy your products. This, I think, becomes reason number 69, right after OnStar-Cannot-Be-Disabled-And-It-Comes-Standard-Whether-Or-Not-You-Want-It and Screw-You-American-Car-Buyer-We-Only-Make-Trucks-And-SUVs.
"what is Ford doing about the market shift towards SUVs" Seriously? This is a legitimate concern for shareholders? People honestly think Ford lacks for selection in the SUV market? With the Expedition redesign and the EcoSport coming there is no visible light in the gaps between their lineup.
Silly shareholders! Fields should have told them that a new totally redesigned Lincoln Navigator will arrive this summer.