Family could lose control of Ford
But there are new threats to that power today.
As Congress weighs a historic bailout of the U.S. automobile industry, some on Capitol Hill have suggested that bankruptcy is a better option. Detroit's Big Three automakers have bristled at those suggestions and repeatedly insisted that bankruptcy is not an option they would willingly consider.
But Ford Motor Co. has even more reason than the rest to resist. A Chapter 11 filing would put the Ford family on par with other shareholders, stripping its Class B shares of the super-voting power that gives the family control of the company.
Even if Congress approves a bailout, the proposed legislation would require companies that take federal dollars to forgo using the money to pay dividends to investors. Ford Motor Co. suspended its dividend payments two years ago, but restoring them is a priority for many members of the Ford family who had come to rely on dividends for income. That may be why Ford has suggested that it would hold off on taking any federal aid until the automaker really needs it.
"We were asking essentially for a line of credit to draw upon if needed," Executive Chairman Bill Ford Jr. told National Public Radio on Tuesday. "We hope that we never need to use it."
The family's control of Ford has long been the subject of controversy among shareholders. Now, tensions are said to be rising within the family as the company's stock — and the personal fortunes that depend on it — dwindles to its lowest value in decades.
Ford is in a stronger financial position than General Motors Corp. and Chrysler LLC, but just barely. And while CEO Alan Mulally says his company does not need a federal bailout to survive, Ford is joining its Detroit rivals in asking for financial assistance from Washington. More at Detroit News