Ford Shareholders Criticize Automaker’s Economic and Environmental Performance
Press Release
May 12, 2005
Emphasis on Gas Guzzlers has put the company at risk. Shareholders ask
Ford’s Directors to align executive compensation and lobbying policies
with increased gas mileage
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Wilmington, DE After a devastating bond downgrade to ‘junk’ status
by Standard & Poors, investors and environmental advocates inside Ford
Motor Company’s (NYSE: F) annual meeting expressed concern that Ford
is losing market share and profits to foreign competitors like Honda
and Toyota by actively lobbying against increases in national fuel
economy standards, by not implementing a policy to tie executive
compensation to greenhouse gas reductions and by not using current
clean car technologies.
Ford’s sales have fallen for the 10th straight month, while according
to the EPA, Ford has the lowest fleetwide fuel economy of any major
automaker. With rising gasoline prices and increasing concern about
global warming and global security, the company has lost a significant
number of customers that want high-tech, high-efficiency vehicles
rather than heavy, gas guzzling trucks and SUVs. While Chairman and
CEO Bill Ford Jr. has said the company will address this issue, the
company’s lobbying and salary incentive policies show the opposite.
In today’s meeting, shareholders voted their concerns in the form of
two shareholder proposals. Both proposals received well above the 3%
threshold required by the SEC to allow the resolutions to be refilled
in the coming year, should the company not agree to implement them
before then.
* Proposal #4 on Ford’s 2005 proxy questions the company’s policy of
lobbying against increased federal corporate average fuel economy
(CAFE) standards. This resolution, sponsored by Green Century Capital
Management, Sierra Club and U.S. PIRG, received a 6.4% vote.
* Proposal #6 requests that Ford’s Board tie a large portion of senior
executive compensation to progress in reducing greenhouse gas
emissions from Ford’s passenger vehicles. This proposal, sponsored by
Bluewater Network and Global Exchange, received a 5.5% vote.
“Ford has fiercely resisted moves by Congress to raise CAFE
standards,” said Beth Williamson, Shareholder Advocate for Green
Century Capital Management. “Undermining these federal efforts to
protect consumers from rising gas prices and global warming pollution
may harm consumer confidence in Ford’s vehicles and our company’s
competitive positioning.”
SUV sales, which generate the bulk of Ford’s profits, have not
weathered consumer anxiety over gas prices. Ford’s struggling
finances have resulted in the recent downgrade of Ford’s credit to
junk status.
“Ford needs to see the writing on the wall consumers want high
technology and clean cars that go farther on a gallon of gas,” stated
Pamela Irwin, National Conservation Organizer for the Sierra Club’s
Global Warming and Energy Program. “Instead of spending money on
lobbyists to fight fuel economy standards, they should be spending it
on engineers to make high quality, low emission vehicles.
Anna Aurilio, Legislative Director of U.S. PIRG, added, “Instead of
using influential lobbying staff like former top Bush Administration
lobbyist Ziad Ojaki to block progress on fuel economy standards, Ford
should become a leader in producing cars that will save consumers
money at the pump.”
Shareholders also called on the company to use its executive
compensation policy to create incentives for management to build a
more efficient vehicle fleet.
“We believe that an efficient method of protecting shareholder equity
against future oil price increases and increasing government
regulation of greenhouse gas emissions is to tie executive
compensation to progress in reducing greenhouse gas emissions from
Ford’s automotive products,” said Russell Long, Director of Bluewater
Network.
Jennifer Krill, representing Global Exchange and the Jumpstart Ford
Coalition, stated, “Curbing greenhouse gas emissions from automobiles
will be one the key drivers determining competitiveness in the
automobile industry over the next few decades; establishing an
incentive program will ensure that our Company regains lost market
share of recent years.”
All of the below organizations were represented at today’s annual
meeting. They will continue to press Ford to improve the company’s
environmental and business practices as they relate to fuel economy
and global warming pollution in the months ahead.
Green Century Capital Management (GCCM) is an environmental investing
firm which focuses on environmentally progressive companies and uses
shareholder advocacy to improve environmental responsibility.
Bluewater Network promotes critical policy changes in government and
industry to protect the earth’s finite and vulnerable ecosystems.
The Sierra Club is the nation’s oldest, largest, most influential
grass-roots environmental organization with over 800,000 members
nationwide.
U.S. Public Interest Research Group is the national lobbying office
for the state Public Interest Research Groups. PIRGs are nonpartisan,
nonprofit environmental and consumer advocacy organizations that are
active across the country.
Global Exchange is an international human rights organization
dedicated to promoting environmental, political and social justice.
