Members of the board as of early 2007 are: Chief Sir John Bond, Richard Manoogian, Stephen Butler, Ellen Marram, Kimberly Casiano, Alan Mulally(President and CEO), Edsel Ford II, Homer Neal, William Clay Ford Jr., Jorma Ollila, Irvine Hockaday Jr., John L. Thornton and William Clay Ford(Director Emeritus).[11]
The main corporate officers are: Lewis Booth (Executive Vice President, Chairman (PAG) and Ford of Europe), Mark Fields (Executive Vice President, President of The Americas), Donat Leclair (Executive Vice President and CFO), Mark A. Schulz (Executive Vice President, President of International Operations) and Michael E. Bannister (Group Vice President; Chairman & CEO Ford Motor Credit).[11] Paul Mascarenas (Vice President of Engineering, The Americas Product Development)
Recent company developments
During the mid to late 1990s, Ford sold large numbers of vehicles, in a booming American economy with soaring stock market and low fuel prices. With the dawn of the new century, legacy healthcare costs, higher fuel prices, and a faltering economy led to falling market shares, declining sales, and sliding profit margins. Most of the corporate profits came from financing consumer automobile loans through Ford Motor Credit Company.[12]
By 2005, corporate bond rating agencies had downgraded the bonds of both Ford and GM to junk status,[13] citing high U.S. health care costs for an aging workforce, soaring gasoline prices, eroding market share, and dependence on declining SUV sales for revenues. Profit margins decreased on large vehicles due to increased "incentives" (in the form of rebates or low interest financing) to offset declining demand.[14]
In the face of demand for higher fuel efficiency and falling sales of minivans, Ford moved to introduce a range of new vehicles, including "Crossover SUVs" built on unibody car platforms, rather than more body-on-frame chassis. In developing the hybrid electric powertrain technologies for the Ford Escape Hybrid SUV, Ford licensed similar Toyota hybrid technologies[15] to avoid patent infringements.[16] Ford announced that it will team up with electricity supply company Southern California Edison (SCE) to examine the future of plug-in hybrids in terms of how home and vehicle energy systems will work with the electrical grid. Under the multi-million-dollar, multi-year project, Ford will convert a demonstration fleet of Ford Escape Hybrids into plug-in hybrids, and SCE will evaluate how the vehicles might interact with the home and the utility's electrical grid. Some of the vehicles will be evaluated "in typical customer settings," according to Ford.[17][18]
In December 2006, the company raised its borrowing capacity to about $25 billion, placing substantially all corporate assets as collateral to secure the line of credit.[19] Chairman Bill Ford has stated that "bankruptcy is not an option".[20] In order to control its skyrocketing labor costs (the most expensive in the world), the company and the United Auto Workers, representing approximately 46,000 hourly workers in North America, agreed to a historic contract settlement in November 2007 giving the company a substantial break in terms of its ongoing retiree health care costs and other economic issues. The agreement includes the establishment of a company-funded, independently-run Voluntary Employee Beneficiary Association (more commonly known as a VEBA) trust to shift the burden of retiree health care from the company's books, thereby improving its balance sheet. However, this arrangement will not begin to take effect until January 1, 2010. The agreement also gives hourly workers the job security they were seeking by having the company commit to substantial investments in most of its factories.
The automaker reported the largest annual loss in company history in 2006 of $12.7 billion,[21] and estimated that it would not return to profitability until 2009.[22] However, Ford surprisedWall Street in the second quarter of 2007 by posting a $750 million profit. Despite the gains, the company finished the year with a $2.7 billion loss, largely attributed to finance restructuring at Volvo.[23]
In June 2, 2008, Ford sold its Jaguar and Land Rover operations to Tata Motors for $2.3 billion.[24][25]
In January 2008, Ford launched a website listing the ten Built Ford Tough rules as well as a series of webisodes that parodied the show COPS (TV Series).
During November 2008, Ford, together with Chrysler and General Motors, sought financial aid at Congressional hearings in Washington D.C. in the face of worsening conditions caused by the automotive industry crisis. The three companies presented action plans for the sustainability of the industry.[26] The Detroit based automakers were unsuccessful at obtaining assistance through Congressional legislation. GM and Chrysler later received assistance through the Executive Branch from the T.A.R.P. funding provisions.[27] On December 19, the cost of credit default swaps to insure the debt of Ford was 68 percent the sum insured for five years in addition to annual payments of 5 percent. That means it costs $6.8 million paid upfront to insure $10 million in debt, in addition to payments of $500,000 per year.[28] In January 2009, Ford announced a $14.6 billion loss in the preceding year, making 2008 its worst year in history. Still, the company claimed to have sufficient liquidity to fund its business plans and thus, did not ask for government aid.
"The Way Forward"
In the latter half of 2005, Chairman Bill Ford asked newly-appointed Ford Americas Division President Mark Fields to develop a plan to return the company to profitability. Fields previewed the Plan, dubbed The Way Forward, at the December 7, 2005 board meeting of the company; and it was unveiled to the public on January 23, 2006. "The Way Forward" includes resizing the company to match current market realities, dropping some unprofitable and inefficient models, consolidating production lines, and shutting fourteen factories and cutting 30,000 jobs.[29]
These cutbacks are consistent with Ford's roughly 25% decline in U.S. automotive market share since the mid-late 1990s. Ford's target is to become profitable again in 2009, a year later than projected.[citation needed] Ford's realignment also includes the sale of its wholly owned subsidiary, Hertz Rent-a-Car to a private equity group for $15 billion in cash and debt acquisition. The sale was completed on December 22, 2005. A 50-50 joint venture with Mahindra and Mahindra Limited of India, called Mahindra Ford India, Limited (MIFL), ended with Ford buying out Mahindra's remaining stake in the company in 2005.[30] Ford had previously upped its stake to 72% in 1998.[31]
Chairman and Chief Executive Officer Ford also became President of the company in April 2006, with the retirement of Jim Padilla. Five months later, in September, he stepped down as President and CEO, and naming Alan Mulally as his successor. Bill Ford continues as Executive Chairman, along with an executive operating committee made up of Mulally, Mark Schulz,Lewis Booth, Don Leclair, and Mark Fields.
Online
The domain ford.com attracted at least 11 million visitors annually by 2008 according to a Compete.com survey.
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