Ford Motor Co., the automaker whose founding family holds 40 percent voting control, named former Bank of America Corp. Chief Financial Officer James H. Hance Jr. to its board as it seeks to reduce debt on its balance sheet.
Hance, 65, increases the board to 14 members, Dearborn, Michigan-based Ford said today in a statement. Hance retired from Bank of America in 2005 after 18 years with the company and is now the non-executive chairman of Sprint Nextel Corp.
“Jim brings to Ford’s board of directors an extremely strong financial background and a track record of success both as an executive and a director for several companies,” Executive Chairman Bill Ford, great-grandson of founder Henry Ford, said in the statement.
Ford managed to avoid the bankruptcies that befell its U.S. rivals because it borrowed $23 billion in late 2006 before the recession. That left the automaker with a debt load that Chief Executive Officer Alan Mulally has said is now a competitive disadvantage. Ford paid down $4 billion on its obligations June 30, leaving it with about $27 billion in automotive debt.
“Ford banked a huge cash pile well before the market cratered,” said Joe Phillippi, president of AutoTrends Consulting of Short Hills, New Jersey. “They’ve had a good financial team, and Hance will serve to buttress that.”
Hance will serve on Ford’s audit committee, finance committee and the nominating and governance committee, the automaker said. Hance also is a director at Cousins Properties Inc., Morgan Stanley Corp. and Duke Energy Corp. and is a senior adviser to the Carlyle Group.
“I’m very excited to have this opportunity to serve on the Ford board of directors and to work with Bill Ford, Alan Mulally and the other directors,” Hance said in the statement. “This is a company that has aggressively restructured over the past few years and is profitably growing.”
Ford reversed three years of losses by earning $2.7 billion in 2009. The company’s U.S. sales are up 27 percent this year, and Mulally has said it will be “solidly profitable” in 2010.
Ford rose 3 cents to $10.62 at 4 p.m. in New York Stock Exchange composite trading. The shares have risen 6.2 percent this year.