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Author: TMFBreakerTAllan Big gold star, 5000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 18054  
Subject: Re: way forward or wounded? Date: 2/2/2007 8:17 AM
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"In a company the size of Ford, 40 per cent is a huge block of stock. So what I said is true."

That contol is accomplished by a separate class of shares that have the voting rights - it is not 40% of the outstanding stock. So, you are definitely right that they have control...and those shares are entitled to twice the dividend up to 50 cents per year.

In contrast, I would think that control and income can be viewed as a good thing as well.

On one hand, the family incentive to make Ford a viable company and result in a shareholder friendly attempt to restructure and return the company to profitability. And in that regard I am thinking about a long term investment. Contrast this with GM which has no such added incentive to do everything possible to stay out of bankruptcy.
Plus, Ford family control and the fact the family shares put a face on the shareholders who rely on Ford for their livelihood, emphasises a longterm solution to fix Ford. For me, that type of shareholder friendly thought process is just as likely to occur.

Now, the counterargument is equally plausible. But what measures or changes could Ford undertake that would be prohibited by the family control?

It appears that Ford has seriously attempted to pare down its costs. I also like that it took the brunt of the pain of closings and buyouts up front.

This is a great story to watch as you said. And for me that is on two levels. How will Ford be able to distinguish and improve its brand, especially given the current collective thought about its products. And how will a business that generates that much revenue be able to survive and continue to do so.

The story is even better, especially when we can contrast the business with GM and the moves that GM makes with similar challenges in terms of declining market share and escalating costs. I wonder if there will be a sharp delineation in strategy due to the separate corporate control structures.


T. Allan
No F or GM shares owned

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