The writer, a Los Angeles freelancer and former Detroit News business reporter. He blogs at StarkmanApproved.com.
By Eric Starkman
Let’s cut Ford executive chairman Bill Ford some slack. The billionaire’s $17.3 million in compensation last year included $636,395 for personal use of aircraft, which spared him having to mix with the little people at 35,000 feet. Being born a Ford confers many privileges, so it’s understandable that Bill goes through life with a sense of entitlement.
Ford betrayed his entitlement in a recent interview with the New York Times, when he complained electric vehicles have become too politicized.
“Some of the red states say this is just like the vaccine, and it’s being shoved down our throat by the government, and we don’t want it,” Ford told the Times. “I never thought I would see the day when our products were so heavily politicized, but they are.”
At a town hall meeting with employees last month, Ford railed about politicians weighing in on the UAW strike, and this was even before President Biden made a cameo appearance in Detroit with striking UAW workers.
"What does anger me is the behavior of the politicians. Honestly, it's a circus we don't need because it doesn't help our employees and it doesn't help our company," Ford said, according to a transcript obtained by the Detroit Free Press.
I share Ford’s feigned disdain for politicians, which is why in the more than two decades I ran my New York-based public relations firm, I never sought out government grants.
Ford Motor Co. has no such qualms.
According to Good Jobs First, which tracks companies that sponge of taxpayers, Ford has received $7.7 billion in government handouts since 2010, making it the No. 3 ranked corporate moocher.
Ford’s electric Mustang Mach-E, which the company proudly manufactures in Mexico, is eligible for a $7,500 tax credit. Without that incentive, Ford would have even more difficulty unloading its electric Mustangs, which the Wall Street Journal reported there is now a 3½-month supply, more than double the industry average.
Let’s not forget the $110 million in public funds that subsidized construction of Ford Field, home of the Ford family’s Detroit Lions.
Politicians were responsible for all the taxpayer largesse that’s helped enrich Ford and his family.
Bill Ford lamenting the politicization of electric vehicles is especially galling in wake of the sweetheart $9.2 billion below market loan Ford Motor received in June to fund much of its promised $11 billion investments to build an EV factory and a couple of battery plants in Tennessee and Kentucky. Energy Secretary and former Michigan governor Jennifer Granholm diverted the money to Ford from a fund earmarked to support upstart companies and research for projects that possibly aren’t commercially sustainable but could provide impactful benefits.
Wall Street expects Ford to report mega profits this week, which makes Granholm’s $9.2 billion loan to Ford highly questionable. Electric vehicles are supposedly the future, so why are U.S. taxpayers subsidizing investments highly profitable Ford must make to remain competitive and in business?
Ford’s Tennessee and Kentucky investments are for the electrification of its most profitable F-series pickups.
“This is a transformative moment where Ford will lead America’s transition to electric vehicles and usher in a new era of clean, carbon-neutral manufacturing,” said Bill Ford in the news release announcing the investments. “With this investment and a spirit of innovation, we can achieve goals once thought mutually exclusive – protect our planet, build great electric vehicles Americans will love and contribute to our nation’s prosperity.”
What makes the DOE loan especially obscene is Ford’s declaration that it will pay out $600 million in dividends in the fourth quarter, enriching the company’s shareholders. Wall Street crows that the primary obligation of publicly traded companies is to their shareholders, yet it’s U.S. taxpayers who are shouldering the risks of Ford’s EV investments.
It’s a heads Ford investors win; tails taxpayers lose proposition. If Ford’s EV investments pay off, the company’s shareholders could potentially yield great benefits. The best U.S. taxpayers can hope for is that Ford remains in business to pay back their loan.
Bill Ford and his family are major shareholders in Ford, which means they benefit greatly from the company’s dividend payments. The dividend payments also buttress Ford’s stock price, which also benefits Bill Ford and his family and keeps shareholders from demanding the firing of CEO Jim Farley for his dismal performance.
How Ford came to its sweetheart $9.2 billion loan should be the focus of a Congressional investigation.
As I wrote about in my starkmanapproved blog, Granholm in April of this year named Chris Smith, Ford’s chief lobbyist, to her Energy Advisory Board, which she said was “an important component of DOE’s strategy to improve its research and development portfolio and program activities.” Weeks later, Granholm signed off on the $9.2 billion loan to Ford. Granholm’s husband previously held shares in Ford, a detail that Granholm didn’t initially disclose.
Smith reports to Steven Croley, Ford’s chief policy officer and general counsel, who I have mentioned quite favorably in my blog multiple times, including this post. I’ve yet to come across a general counsel better credentialed than Croley and his importance to Ford is underscored by the fact that he reports to CEO Farley and Jon Huntsman, Ford’s vice chair for policy.
According to his Ford bio, Croley earned his law degree from Yale, holds a doctorate in government from Princeton, and made partner at the powerhouse law firm Latham & Watkins. He also served as associate dean at the University of Michigan Law School.
From 2014 to 2017, Croley served as general counsel for the U.S. Department of Energy. He spent the previous four years in the White House, first as special assistant to President Obama for regulatory policy, then as deputy counsel overseeing legal policy.
It’s not a reach to say that Ford, Granholm, and the Department of Energy appear to be one big happy family.
Bill Ford in his interview with the New York Times defended the compensations of GM CEO Mary Barra and Ford CEO Jim Farley, likening them to elite athletes.
“You have entertainers and athletes who are making more than Jim Farley and Mary Barra. But that’s what the market is, and the company with the best talent wins, period,” he said.
Tom Brady, the most decorated player in NFL history, made $235.2 million in his 20 years with the New England Patriots. In that period, Brady led his team to seven Super Bowls and was named the league’s MVP three times.
By comparison, in her nine years as GM’s CEO, the UAW says Mary Barra has pocketed more than $200 million. GM’s stock was trading at near $40 when Barra assumed command. It currently trades around $30. GM is badly lagging on the EV front, despite being an early EV pioneer.
Barra and Farley have hardly distinguished themselves as elite CEOs.