Ford Shareholders Criticize Automaker's Economic and Environmental Performance
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
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.
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.