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Ford executives welcome Kerkorian investment

/ Source: The Associated Press

Ford Motor Co. welcomed a significant investment by billionaire Kirk Kerkorian and executives told shareholders Thursday that it underscored the strength of turnaround plans for the second largest American car company.

Executives said their work to return Ford to profitability by 2009 was taking hold, just over a week after Kerkorian's Tracinda Corp. said it had acquired a 4.7 percent stake in the company.

"We welcome Tracinda and thank them for their confidence in our plan," Ford Chairman Bill Ford said during the company's annual meeting in Wilmington.

Kerkorian has held significant ownership stakes in General Motors and Chrysler, where he advocated for changes. His investment company said last week it hopes to amass a 5.6 percent stake in the automaker, expressing confidence in Ford Chief Executive Alan Mulally's work.

Ford shares on Thursday rose 3 percent, or 24 cents, to $8.20.

Mulally acknowledged that the slowing U.S. economy will create challenges, but said Ford was making progress. Ford has worked to reduce costs in North America and adjusted production levels in response, he said.

"Our plan is working, and these priorities will remain our priorities for the foreseeable future," Mulally said.

Ford heard some complaints about the March sale of its Jaguar and Land Rover businesses to India-based Tata Motors Ltd. for $2.3 billion, a third of the original purchase price.

"I am absolutely heartbroken you sold Jag," said Dr. Hilda Meth of Richmond, Va., who said she has owned Ford cars for years.

Company officials said they wanted to focus on their core brands.

Ford reported losses of $2.7 billion for 2007, but turned a surprise $100 million profit during the first quarter this year. The company also reached a labor agreement recently with auto workers in Canada.

During Thursday's meeting, 72.8 percent of the shareholders rejected a measure to give one vote to each share of outstanding stock in an attempt to dilute the Ford family's control, a slightly stronger showing of support than last year for the status quo.

Descendants of Henry Ford, who make up 40 percent of the combined voting power of all outstanding family stock, are allowed 16 votes each while other shares get one vote apiece. Ford family members collectively own 70.9 million shares of so-called "Class B" Ford stock.

Shareholders rejected other measures by wide margins that would prevent new stock options from being awarded to senior executives and eliminate any restrictions on shareholders' right to call a special meeting.

Other rejected proposals included requirements for Ford to provide a report on the company's procedures for making political contributions and expenditures, and the adoption of principles urging comprehensive health care reform.

Shareholders elected 13 members of the board of directors, with each director receiving no less than 86.2 percent.

Only 56 shareholders showed up in person, the lowest attendance in several years. They raised environmental and fiscal issues and wanted information on Ford's dealership network and the company's leadership.