Join Date: Feb 2001
Location: The Hills of North Georgia,USA
The line blurs between public, private deals for Bill Ford Jr.
By Daniel Howes / The Detroit News
Back in 1999, when Ford Motor Co. was raking in billions, shareholders were happy and non-executive Chairman William Clay Ford Jr. was focused more on getting a new stadium for the Detroit Lions, he bought 400,000 shares in Goldman Sachs Group Inc.'s initial public offering.
Paying $53 each, the shares soared to $130 by mid-2000 but have settled back to roughly $74, representing a paper profit of $8.4 million. If Bill Ford wanted to make a quick buck -- not likely, since he doesn't need the cash and his family has maintained close ties to Goldman Sachs since the 1950s -- he missed his chance.
Now a Ford shareholder is alleging that Goldman Sachs shares were allocated to Bill Ford because he theoretically could use his influence to steer business to Goldman Sachs. The shareholder wants Bill Ford to sell his stake and return any profits to the company he now leads.
Those are the facts we know. Here are some more:
Bill Ford's transaction was a private one, made before he became a Ford employee and was bound by its code against profiting from ties to outside suppliers. Second, the deal appears to have violated no bylaws of Ford's board -- even though a Goldman Sachs executive, John Thornton, is a Ford director. Third, the deal is legal under federal regulations and generally accepted by all but the most stringent corporate governance codes.
There is only one problem -- it just doesn't look right, not now. Too much has changed since the day three years ago when Bill Ford, who understands the importance of integrity more than some think, bought the largest chunk of shares Goldman Sachs offered to individual investors.
Equity markets plummeted, impoverishing some and prodding others to seek scapegoats. Corporate America has been sullied, emboldening regulators to target self-dealing and embrace a pure-as-snow orthodoxy that increasingly appears counterproductive. And Bill Ford is now chief executive of the company founded by his great-grandfather.
This isn't about money. Any boost to Ford's balance sheet from Bill Ford selling his shares in Goldman Sachs would be absurdly small. Dumping the shares to squelch continuing questions would only underscore the notion that Bill Ford did something wrong besides, that is, having the name Ford and long ties to Goldman Sachs.
This is about balancing principle, privacy and public transparency. The campaigners clamping down on real corporate abusers are starting to look more like a cloistered order, demanding purity and freedom from entanglements on all who would sit on boards and run companies. That leaves a lot of talent out.
Do Ford shareholders really want a board of directors laden with artists, college professors and retired union leaders? Or do they need savvy leaders from finance and manufacturing and technology who understand business and have, yes, ties to others like them?
Ford's board is forming a committee to study the shareholder inquiry questioning Bill Ford's Goldman Sachs deal. The board also is undertaking a sweeping review of its broader corporate governance policies, a response to legislation and SEC rules passed in the wake of the Enron and Tyco scandals.
Bill Ford's private finances are his business. But as chairman and CEO of Ford, some of his private choices now have public ramifications. That is the issue.
My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.
My next Ford.....