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Ford to address shareholders after Kerkorian investment



By KEN THOMAS, AP
07 May 2008 @ 02:34 pm ET

WASHINGTON - Ford's most prominent new shareholder is not expected at the automaker's annual meeting Thursday, but his formidable presence will be felt.

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Ford Motor Co. executives are to brief shareholders in Wilmington, Del., on the company's progress more than a week after billionaire investor Kirk Kerkorian disclosed that he had acquired a 4.7 percent stake in the car company.

Kerkorian's Tracinda Corp. has said it hopes to amass a 5.6 percent ownership in Ford, expressing confidence in Chief Executive Officer Alan Mulally's efforts to restore the automaker to profitability by 2009.

Mulally will speak to shareholders on the heels of the Kerkorian buy, a surprise $100 million profit during the first quarter and a new labor pact with auto workers in Canada. Ford is not expected to earn a profit this year and faces a weakened U.S. economy and sluggish auto sales, but the company's fortunes have improved.

"The momentum is on Ford's side at this point," said Mark Warnsman, an analyst with Calyon Securities.

In announcing the stock purchase, Tracinda vouched for Mulally's performance and predicted Ford would "continue to show significant improvements" in the months ahead.

Kerkorian revealed he bought 100 million shares of Ford at about $6.91 a share and has pledged to buy 20 million more shares at $8.50 apiece. Some analysts suggest he may simply view Ford's stock as a good bet capable of providing a hefty return.

Ford shares slipped 17 cents to $8.10 on Wednesday afternoon, meaning Kerkorian's shares already have made more than $134 million since early April.

The 90-year-old casino mogul rarely has acted passively as a major shareholder. He pressed for significant changes when he invested heavily in Chrysler and General Motors Corp.

Kerkorian's top deputy, former Chrysler Chief Financial Officer Jerry York, recently said Ford should sell its Mercury and Volvo brands, a move that quickly was dismissed by Ford officials. Ford sold its Aston Martin, Land Rover and Jaguar brands, but has said it plans to keep Volvo and work on making the unit more profitable.

Copyright 2009 The Associated Press. All rights reserved.
This material may not be published, broadcast, rewritten or redistributed.

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