Henry Ford III is rising to top of dynasty in trouble
Bloomberg
When Wall Street analysts call Ford Motor Co.’s investor relations department these days, they’re likely to be greeted by Henry Ford himself.
It’s not the founder, of course, and it’s not a recording of him either. It’s Henry Ford
III, the patriarch’s great-great grandson, who at age 39 has been thrust into the crucial role of liaison between the faltering automaker and its anxious investors.
The III’s ascent -- along with that of his cousin, the 32-year-old Alexandra Ford English, just named to the board of electric-truck maker Rivian Automotive Inc. -- marks a coming of age for the fifth generation of the Ford dynasty. For all but 20 of its almost 117 years of existence, Ford has been led by a family member. And while critics lay much of the blame for the company’s current struggles on the Fords, the family sees Henry and Alexandra as their best hope of maintaining control for years to come.
“They’ve moving above the radar line now,” Jeffrey Sonnenfeld, associate dean at the Yale School of Management, said of the automotive heirs. “This is what they were destined for when they entered the company. When we look at their dads, they’re on the same trajectory, with at least one, if not both, ending up on the board.”
The changes come as the company endures another existential crisis, with losses mounting and North American factories idle in the face of coronavirus shutdowns. But after Ford shareholders gathered for their virtual annual meeting Thursday, the founding family remains firmly in control, aided by a special class of stock that gives them 40% voting power. The arrangement once again came under scrutiny at the annual meeting. A shareholder proposal to strip the family of its special class of stock and go to a one-share, one-vote arrangement garnered 35% support, up from 34% last year. Some investors have long complained that superpower voting weighs down the value of publicly traded companies, while giving founding families sometimes unwarranted control.
“That’s why we don’t have Kings and Queens anymore -- it’s a roll of the genetic dice,” said Nell Minow, vice chair with ValueEdge Advisors, a shareholder advocacy firm. “We’ve seen in companies like Motorola and Anheuser Busch that it hasn’t worked out to continue to pass the baton from generation to generation.”
Since Bill Ford became chairman in 1999, the automaker’s shares are down 91%, while the S&P 500 index is up 129%. Unlike General Motors and Chrysler, however, Ford avoided bankruptcy in 2009.
On Thursday, Bill Ford expressed disappointment in the stock performance but confidence that the shares will rise as the company executes its turnaround efforts, which include new models such as the electric Mustang MachE and the revived Bronco sport-utility vehicle.