- The Washington Times - Wednesday, June 11, 2008

SOUTHFIELD, Mich. | Billionaire Kirk Kerkorian said Ford Motor Co. stockholders offered to sell 50 times the amount of shares he sought to buy, suggesting a lack of confidence in Chief Executive Officer Alan Mulally’s turnaround plan.

Investors tendered 1.02 billion shares, or almost half of Ford’s 2.2 billion shares outstanding, sending the stock down 3.8 percent to close at $6.12 in New York trading Tuesday. Mr. Kerkorian’s Tracinda Corp. said it will buy 20 million shares, or almost 2 percent of the stock submitted, for $8.50 each.

“It appears almost like it’s an act of desperation,” said Dennis Virag, president of Automotive Consulting Group in Ann Arbor, Mich. The “mood is bleak” for “any stakeholder in Ford, from employees to shareholders.”

Ford shares have lost about 21 percent since the Dearborn, Mich., automaker abandoned its goal last month of making a profit next year. A surge in oil prices and a slowing economy are forcing customers to rein in purchases of gas-guzzling trucks, which account for more than half of Ford’s U.S. sales.

Mr. Kerkorian, 91, is offering $170 million for the stock, or 34 percent more than Monday’s closing price.

“Obviously, the market is saying $8.50 is one hell of a price for the next few years,” said Sean McAlinden, an economist with the Center for Automotive Research in Ann Arbor. “I don’t think you are going to see $10 a share or $9 a share until deep into 2011.”

Ford, General Motors Corp. and Chrysler LLC were outsold for the first time in their home market by Asian automakers last month. The U.S. companies have relied more on pickup trucks and sport utility vehicles for profits, and sales of those models shriveled as gasoline prices climbed toward $4 a gallon.

Ford’s F-Series pickup was unseated as the top-selling vehicle in the U.S. in May by two car models from Honda Motor Co. and two from Toyota Motor Corp. That was the first time a car outsold the F-Series during a month since Ford’s own Taurus accomplished it December 1992. The automaker is increasing production of cars and slashing output of trucks.

The automaker, which has lost $15.3 billion in the past two years, said on May 22 that a slowing U.S. economy and rising fuel and materials prices are prompting new cuts in jobs and production. Ford plans to dismiss an undetermined number of U.S. employees by Aug. 1 as part of a plan to cut salaried worker expenses by 15 percent.

“We decided to be proactive - it was important to act swiftly and deal with a change in circumstances,” Executive Vice President Mark Fields told reporters late Monday at a Lincoln-Mercury dealership in Garden City, Mich.

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