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 yesterday’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 4.5% 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.”
“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.
Shareholders also called on the company to use its executive compensation policy to create incentives for management to build a more efficient vehicle fleet.
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