Shareholders ask Ford's Directors to align executive compensation and lobbying policies with increased gas mileage.
Emphasis on Gas Guzzlers has put the company at risk.
For Immediate Release: May 12, 2005
Wilmington, DE -- After a devastating bond downgrade to 'junk' status by Standard & Poor's, 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. Chairman and CEO Bill Ford Jr. has said the company will address this issue, but 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 refiled 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, Ecopledge, 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, Environmental Advocate for Ecopledge. "Continued efforts to undermine these federal efforts, rather than focusing on developing better technology, may have dire consequences for both the environment and for Ford's future success."
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 of the Sierra Club. "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.
Jennifer Krill, representing Global Exchange and the JumpStart Ford Coalition, stated, "Curbing greenhouse gas emissions from automobiles will be one of the key drivers determining competitiveness in the automobile industry over the next few decades; establishing an incentive program will ensure that our Company regains lost market share of recent years."
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.
Ecopledge is a public interest organization that focuses on improving corporate environmental practices. It engages in shareholder advocacy in partnership with investment adviser Green Century Capital Management, Inc.
Green Century Capital Management, Inc. administers the Green Century Funds, the first family of no-load, environmentally responsible mutual funds.
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.
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