July 13 (Bloomberg) -- General Motors Corp. stands at center stage as it wrestles with a proposal from one of its major shareholders to hook up with two European carmakers.

Guess what? Ford Motor Co., Detroit's other big carmaker, needs a partner just as much and for many of the same reasons: falling market share, a product mix tilted toward gas-hungry vehicles, a junk credit rating, soaring employee and retiree costs and weakened finances.

Unfortunately for most shareholders, Ford is an unlikely candidate for a broad collaboration similar to the one GM is contemplating with Renault SA and Nissan Motor Co. The reason: the Ford family's controlling interest in the No. 2 U.S. automaker.

Ford Motor's unusual capital structure has insulated the Ford family from the checks and balances on management found at GM and most other publicly traded companies. Restive shareholders and independent-minded directors at least are taking a stand at GM. The same won't happen easily at Ford.

Henry Ford II ran Ford Motor from World War II until the 1980s. After the war, he turned over most executive duties to a group of U.S. Army Air Corps veterans that became known as the whiz kids. Former U.S. Defense Secretary Robert McNamara was among its members.

Following Henry Ford II's death in 1987, the Ford family, led by William Clay Ford Sr., asserted their right to oversee top management. Many top executives left or retired.

The Fords, now led by Chief Executive Officer William Clay Ford Jr., own only about 4 percent of the company' equity, but they control 40 percent of the voting shares through a special Class B stock created in initial public offering of stock in 1956.

Extended Family

The extended family keeps its Class B shares in a trust, votes them as a bloc and has been intent on making sure no non- family investor can gain meaningful power.

Rick Wagoner, chairman of GM, probably wishes a member of his family, or at least a close friend, owned a super-voting class of GM stock. That way, he might not have to be so mindful of Kirk Kerkorian, the pesky billionaire who owns 9.9 percent of GM's shares and is insisting that Wagoner study the benefits and drawbacks of hooking up with Renault and Nissan.

Kerkorian's fellow GM shareholders should be grateful that at least one of their ranks has the nerve, as well as the clout, to hold GM management accountable for delivering respectable results, which can only lead to a higher valuation of their company.

Under-Performed

Sure, Kerkorian's immediate priority is to increase the value of his $1.7 billion investment in GM. Nothing wrong with that: Growth potential is a valid reason to choose an investment in one company rather than another.

Over the last decade, the Dow Jones Industrial Average returned an average of more than 9.1 percent a year, while GM stock managed 0.71 percent and Ford a loss of 1.1 percent.

Ford's operating problems are myriad. It's too dependent on fuel-hungry pickup trucks and the Explorer sport-utility vehicle, which aren't selling well. Ford's midsize family sedan, the Five Hundred, hasn't excelled. Too many luxury brands -- Lincoln, Jaguar, Land Rover, Volvo, Aston Martin -- require more capital than Ford can hope to raise.

The Ford family can thank the heavens that an earlier generation of executives had the foresight to buy a major stake in Mazda Motor Corp. of Hiroshima, Japan. Mazda, now a third owned by Ford, has furnished the engineering and designs for many current Ford models such as the Escape small sport-utility vehicle.

State of Mind

One can only imagine the dismal thoughts running through the minds of Bill Ford Jr. and the dozens of heirs of Henry Ford, the automaker's founder. At one time their 70.8 million shares of Ford Motor stock -- now worth about $480 million and the source of $30 million of dividend income annually -- must have seemed as mighty as the company's blue oval trademark.

Much worse than the 81 percent slide in the share price since 1999, the year Bill Ford Jr. took over as chairman, must be the sense that a great American icon has been brought low. The family gambled on taking management in its own hands and lost.

Perhaps the Fords would have been more successful if, like the Toyota family, they had sired engineers and manufacturing experts rather than business school graduates, such as Bill Ford Jr. and his cousin, former Ford Credit Co. president Edsel Ford.

As the Fords watch their company stumble toward possible insolvency within the next few years, they might consider that the super-voting stock could be a barrier keeping a potential ally or collaborator away.

Think Again

Even if, for example, Carlos Ghosn, CEO of Renault and Nissan, decided that Ford's operations were a better fit with his than those of GM, he would think twice about investing with partners who can make bad decisions without the discipline of shareholder review.

But it might not be too late to restructure Ford Motor's two-tier stock in a way that makes it a better candidate for an alliance, merger or other restructuring. First, the Ford family would have to agree that Bill Ford Jr. no longer should be running the company.

The decision to return power to outsiders won't be easy. Yet it's far preferable to waiting until it's so late that no one wants even wants to try.

(Doron Levin is a Bloomberg News columnist. The opinions expressed are his own.)

To contact the writer of this column: Doron Levin in Southfield, Michigan at dlevin5@bloomberg.net

Last Updated: July 13, 2006 00:12 EDT