AUTOMOBILES: Ford Stock for Sale?

Old Henry Ford never liked outside stockholders in his company. He quarreled bitterly with them from 1903 until 1919, when he paid $75 million to get rid of them once and for all. But since his death in 1947 automen have often heard rumors that Ford Co. stock would be put on the market. Each time, the rumors were false. Last week the rumor was going around again, and this time Henry Ford II conceded that it was “pretty reliable.” However, said Henry Ford II, “the stock which may be put up for sale is owned by the Ford Foundation. The Ford Motor Co. is planning no sale of stock.” Four Ford Foundation trustees* are now studying ways and means to put Ford stock on the open market.

The foundation, whose principal asset is the 3,089,908 shares of Class A (nonvoting) Ford stock,† would like to diversify this investment. But the foundation, if and when it puts a part of its holdings up for sale, faces a problem. The stock at present has no voting rights, thus no voice in management. Nonvoting common stock cannot be listed on the New York Stock Exchange, although it can go on the American Exchange. On the other hand, if voting rights are granted to the public shares, it is probable that the Ford family would lose control of the company. Henry II, brothers Benson and William, their mother and sister own only 172,645 shares of Class B stock (at present the only voting stock). Thus it looked as if the foundation stock, when and if it goes on the market, would be nonvoting.

In its September issue, FORTUNE gives the latest estimate of the state of the Ford Motor Co. Gross sales are running at an annual rate of $4 billion, profits at $15 million a month after taxes. In sales, Ford has pulled ahead of U.S. Steel, is running neck and neck with Standard Oil Co. (N.J.) for second place (after General Motors). Most of Ford’s plants are new; the others are completely modernized. One-fourth of Ford’s $1.5 billion postwar profits have been paid out in dividends. For one single year (1950) the Ford Foundation received a dividend check of $86.6 million, or $28 a share. At the end of 1953, net worth of the company had risen to an all-time high of some $1.4 billion, and profits last year were $175 million. For the first half of 1954 the Ford car was in first place in sales—1.1% ahead of Chewy.

*H. Rowan Gaither, president of the Ford Foundation; James F. Brownlee, partner of J. H. Whitney & Co.; John J. McCloy, chairman of the Chase National Bank; Charles E. Wilson, chairman of W. R. Grace & Co.

†Carried on the books at $135 a share, a value set in settling Henry Ford’s estate.