Ford CEO cites progress, some shareholders upset

(Adds CEO, shareholder comments, some background, updates stock price)

By Jui Chakravorty

WILMINGTON, Del., May 10 (Reuters) - Ford Motor Co. (F.N) Chief Executive Alan Mulally said on Thursday the automaker was making progress in its restructuring, even as shareholders chided the company's chairman for not doing enough.

"We are not where we need to be, but we are making very good progress," Mulally told shareholders at the company's annual meeting.

Ford is attempting to engineer a turnaround from last year's record $12.6 billion loss and reinvent itself as a leaner and more flexible competitor.

"You will be pleased with what you see in the months and years ahead," Mulally said, adding that the turnaround would take time. "You can expect from us what I expect from my team

-- clearly stated goals and candid assessments of our progress -- clearly stated goals and candid assessments of our progress based on facts," he said.

But some of the 79 shareholders who attended the meeting expressed anger and opposed the reelection of executive chairman Bill Ford Jr. to the board.

Many shareholders also voted for an initiative to strip the founding Ford family of most of its voting power by converting Ford Class B stock to common stock.

The Class B shares, which represent less than 4 percent of the shares outstanding, give the founding family 40 percent voting power.

The proposal has been rejected for three consecutive years, but received the highest number of votes in favor this year. About 27 percent of votes were cast in favor of the proposal, up from 23 percent last year and 25 percent in 2005.

All eight shareholder proposals were voted down, but that plan drew the highest support of all the resolutions.

Bill Ford said investors are "attracted by long-term stability the Class B shareholders provide to the company."

Mulally told reporters after the meeting that Ford family members are "very, very supportive of the changes" the automaker is making. "They are shareholders; they believe in Ford and want Ford to be successful," he said.

Other proposals included one requiring Ford to set targets for reducing its greenhouse gas emissions and another to produce a report on how the automaker is hurt by higher health care costs.