Now there’s more trouble in paradise. Some Ford investors are expressing anger that the company has elevated two Ford family members to top positions. The fact this has been going on since WWII must have escaped some of the investor’s Ford history. Hey investors, there’s this thing called Google. Use it. There’s a long history of Fords elevating Fords going back to when Hank the Deuce took over Ford operations at the age of 25 during WWII. But family dynasties running large companies don’t have a good track record. So now Ford investors are angry the Ford family is running Ford, and ruining it too.
Many Ford offspring have ascended through the ranks of Ford Motor Company
Many Ford offspring have ascended through the ranks of Ford Motor Company partially due to the family’s special class of Ford stock. That and their 40% voting rights. And while it seems like things are unraveling in Dearborn, two young Ford family members were elevated within Ford to groom them for possibly large roles inside of Ford.
First, Henry Ford III will become the lead in investor relations. He’s 39 and the great-great-grandson of the dude that started it all. And 32-year-old Alexandra Ford English will be installed onto the board of Rivian. As you know Ford has invested over $500 million in Rivian which is developing electric pickups and SUVs.
“Seasoning” is how both Bill and Edsel Ford rose through the ranks at Ford
According to Bloomberg, both were hired on a singular path to the top, or somewhere near the top. This “seasoning” is how both of their fathers ascended through the ranks at Ford over the course of a few years. Bill Ford, Alexandra’s father, landed on Ford’s Board in 1988 while in his 30s. He eventually became CEO from 2001-2006.
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Edsel Ford is Henry III’s father. He also landed on Ford’s Board before becoming the head of Ford’s credit unit. It is one of the most profitable offshoots of the business of building cars. He retired in 1998. Both of the dads have Ivy League educations, business degrees, and worked outside of Ford for a few years before rising through Ford.
There was a shareholder meeting to discuss stripping the family of its special stock
All of this backdrop came to a head at a shareholder meeting scheduled to discuss stripping the family of its special stock and voting arrangement. Arguments were made to replace the family’s special class of stock with a more common one-share, one-vote arrangement according to Bloomberg.
Over 35% of investors favor the change. The argument for softening the family’s control is that family-controlled companies do worse on the stock market. That’s because they tend to try and groom a family member that may or may not have inherited the right genes to actually run a company. DNA can be funny that way.
“We’ve seen in companies like Motorola and Anheuser Busch that it hasn’t worked out”
“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,” says Neil Minow, vice-chair of a shareholder advocacy firm. Of course, being a family member would tend to put more pressure on you to get it right so there’s that.
And it’s not like being the head of investor relations, as Henry III will soon take over, is an easy gig. So he’s not being given the kick-back job to while away his time before he’s old enough to gobble up the family inheritance. “Investor relations is the best place that you can put somebody that you’re trying to groom for leadership because they are going to be dealing with complaints all the time,” Minow said. “It will give him a real reality check.”
“I was originally hesitant to join Ford because I don’t have a technical background”
As for Ford English, she says, “I was originally hesitant to join Ford because I don’t have a technical background and it’s a company built upon engineering. But I knew what I could bring to the company and I was very aware of those skills.”
When you read about family dynasties it sometimes seems like turmoil is part of the job. Fiat and the Agnelli family is a good example. But Ford’s history has been rather devoid of the theatrics that can come with the practice. Henry II had his share of dalliances and brushes with the bottle but his motto was, “Never complain, never explain.” It worked for him for 40 years as head of Ford.