Ford CEO to try to jump-start investor confidence
Reuters / October 10, 2002
DETROIT - Ford's chairman and chief executive will meet key investors on a "road show" beginning next week in a bid to convince them the company that bears his family name has a brighter future than many skeptics think.
Company officials said on Thursday that Bill Ford Jr., great-grandson of the automotive pioneer who founded Ford 99 years ago, will open the meetings with large institutional investors in New York next Thursday, a day after his embattled company reports third-quarter financial results.
Bill Ford will be accompanied on the trip, which will include two days of meetings in New York and a presentation for investors in Boston on Oct. 21, by CFO Allan Gilmour.
Their purpose, according to sources close to the company, will be to tell the investment community that the restructuring plan Ford unveiled in January is on track and slowly pulling the world's second-largest automaker back to profitability.
Company spokesman David Reuter said he did not dispute the fact that selling upbeat news about Ford could be a tall order, especially after the drubbing its stock price took this week amid mounting concerns about its cost structure, pension and healthcare liabilities, and seemingly dismal earnings power.
"I think they will have lots of tough questions," Reuter said.
No one has more riding on Ford's turnaround than Bill Ford, whose extended family owns 40 percent of the company's voting shares. Industry analysts said it was important that the 45-year-old Ford get out and talk with investors, especially at a time when market perceptions about Ford as a company have perhaps never been bleaker.
Dubbed the "Reluctant CEO" by some pundits, Bill Ford has kept a relatively low profile with investors since he took the helm in October last year. But at the Paris auto show last month, even before his company's latest rash of woes on Wall Street, he conceded he needed to give investors and bondholders more face time and personal guidance about Ford's turnaround.
"SPIRALING OUT OF CONTROL"
"I'm not sure they're going to have all the answers that people want to hear, but they need to be out there and be visible and address concerns that people have," Domenic Martilotti, an analyst at Bear, Stearns & Co., said of Ford's planned New York visit and investor perception that the company's turnaround is faltering.
"They need to get out in front of this because it's just kind of spiraling out of control at this point," Martilotti said.
Bill Ford and Ford President and COO Nick Scheele have both insisted in recent weeks that the company is making progress in its restructuring, which includes cutting 10 percent of its work force, or 35,000 jobs, and is aimed at producing $7 billion in pretax profits by mid-decade after last year's loss of $5.45 billion.
They also have stressed that the turnaround strategy, Ford's broadest restructuring in 20 years, is a multiyear plan that will take time before it starts to truly bolster the company's bottom line.
Markets are not patient, however, and one company insider conceded that there was a sense of panic at the Glass House, Ford's world headquarters in Dearborn outside Detroit, late on Wednesday, after its shares fell 7.4 percent on the day to lows last seen since 1991. That capped a 27 percent plunge in October alone.
"He's as shaken as sin," the company source said of one senior member of Ford's management team.
"In this market, with the negative sentiment out there, it's going to be extremely challenging," said Martilotti, when asked about the odds of Ford and Gilmour succeeding in selling an upbeat story to investors.
Ford's shares on Thursday rose 53 cents, or 7.4 percent, to $7.68 in afternoon trade on the New York Stock Exchange amid a broad market rally.
Seeking to drive home a sense of normalcy and perseverance, meanwhile, Ford announced on Thursday that its 2003 annual meeting will be held on June 16 in Dearborn, on the company's 100th anniversary.
Bill Ford, whose uncle Henry Ford II headed the company for 44 years after taking over from Henry Ford I, said the anniversary would allow investors "to reflect on our many past accomplishments and create a vision for our continuing success in the future."
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.....