Robert Rubin resigns from Ford Board of Directors

Robert E. Rubin, an American financier, businessman, and politician who serves as Director, Chairman of the Executive Committee and member of the Office of the Chairman of Citigroup Inc., has resigned from the Ford Board of Directors, the Company stated in a press release issued on Friday. Mr. Rubin joined the Ford board six years ago.

Mr. Rubin is the fourth board member to leave Ford within four months after Carl Reichardt, who had been a member of the Ford Motor Company board of directors since 1986 and served briefly as the chief financial officer under Mr. Ford; Marie-Josee Kravis, a senior fellow at the Hudson Institute and economist; and James Padilla, the first Hispanic to serve as president of the company who retired in July.

Citing potential conflict of interest with his duties at Citigroup, Mr. Rubin decided to resign from the Board. In a letter to William Clay Ford Jr., he said, "As the Board undertakes its upcoming review of strategic options; Citigroup’s multi-faceted relationship with Ford could raise a question whether my relationship with Ford and Citigroup creates an appearance of conflict. Although no conflict currently exists and while I would have liked to remain involved, I have with great regret concluded that I should resign from the Board at this time."

Mr. Rubin’s move instigated some conjectures among analysts that Citigroup, nation's largest financial institution, will be involved in those potential deals, which may include spinning off luxury brands like Jaguar, Land Rover and Aston Martin.

William Clay Ford Jr., who has been overseeing the company’s bid to halt a financial crisis and end market share losses in North America, responded with appraisal for Mr. Rubin, who served as Treasury Secretary from 1995 to 1999. He said that Mr. Rubin “has been a wise and generous counselor to me and to the company, I greatly appreciate the many valuable contributions Bob has made to Ford Motor Company during his six-year tenure,” further adding that “However, I understand and respect Bob’s prudent decision to resign as we continue to explore future strategic options.”

The company has hired Kenneth H.M. Leet, an 18-year veteran of Goldman Sachs and performed European banking operations for Bank of America., earlier this month as a strategic advisor to lead the company’s review and make recommendations on steps to take as part of its rejuvenation efforts.

However, Rubin said he was delighted with the company’s decision to hire Mr. Leet, who is advising Mr. Ford on any alliances involving other auto companies.

Oscar Suris, a Ford spokesman, said the company’s relationship with Mr. Rubin “doesn’t end today. This is merely a move on his part to ensure he’s doing the right thing from a corporate governance standpoint,” Mr. Suris said.

Mr. Rubin’s action comes amid a fluster of activity at Ford, which is struggling hard to keep its grade as the second-biggest company in the American market.

A few days back, the Dearborn, Mich. based Ford, the manufacturer and distributor of automobiles in 200 markets across six continents, confirmed cutting its fourth-quarter production by 21% as sales of pickup trucks and sport utility vehicles (SUV) have been overwhelmed by high gasoline costs. If it happens, then it would be the company’s biggest cut in more than two decades.

With about 300,000 employees and more than 100 plants worldwide, the company warns slashing down of more white-collar job as well as to plan more buyouts for blue-collar workers.

The auto company, which lost nearly $1.5 billion during the first six months of 2006, slashed its dividend in half last month. Earlier this year, Ford declared a turnaround plan for its North American operations, which it called the Way Forward. Under the project, Ford planned to shut 14 factories and axe 30,000 jobs by 2012.

Company shares reached at 24 cents to $8 after the announcement of Mr. Rubin’s resignation along with the reports of Ford's former chief executive, Jacques A. Nasser, may be leading an investment group in a bid for some of Ford's assest.