Ford Motor Co. shareholders voted down a proposal to curb the influence of the its founding family at an annual meeting that featured concern over fuel economy and a sharp exchange over the quality of Bill Ford Jr's leadership as chief executive.

Pressed by environmental activists to take steps to improve Ford's fuel economy, Bill Ford said the company was considering launching a plug-in hybrid, a potential industry first.

Ford is struggling in North America, its largest market, where it lost £850 million in 2005 and another $457 million in the first quarter. It has announced plans to shutter 14 plants and cut 34,000 jobs.

A total of eight shareholder proposals opposed by Ford were voted down at the annual meeting, but two initiatives aimed at curbing the influence of the Ford family in the management of the company drew about one-in-five votes cast.

A proposal to require that Ford separate its chairman and chief executive positions, which are both now held by Bill Ford, drew almost 19 per cent of shareholder votes cast.

"Mr Ford is a failure," said Sam Joanette, a Miami Beach investor, who said he had lost about $1 million in Ford stock since 1999 and spoke in favor of requiring Mr Ford to step down.

"Mr Ford knows he is not qualified, that he is in over his head," said Mr Joanette, who said Mr Ford was engaged in a "never-ending restructuring" and unlikely to meet its commitment to return its auto operations to profit by 2008.

Other shareholders spoke in favour of Mr Ford's leadership.

Mr Ford did not respond to the criticism, instead telling shareholders that management understood that the market was shifting rapidly because of higher oil prices. "We are working very hard on this," he said. "We agree gas prices are high and oil is not going to be any more plentiful or easier to find in the future."

Asked about the company's commitment to reducing its reliance on gas-guzzling trucks and sport-utility vehicles, Mr Ford said the company was weighing a plug-in hybrid.

Plug-in hybrids can be charged from a mains outlet and have greater range in all-electric mode. For longer distances a small gasoline engine kicks in, powering the vehicle like the hybrids currently offered by automakers.

Environmentalists have called plug-in technology one of the most immediate ways to improve fuel economy and cut greenhouse gas emissions.

"Our fleet is getting smaller and we are working hard on ethanol, biofuels and hybrids," Mr Ford said.

High gas prices have cut deeply into demand for profitable Ford sport-utility vehicles, like the Explorer, and the company's market-leading F-Series pickup truck models are competing in the most-heavily discounted part of the market.

Mr Ford, who has foregone a cash salary since the company ousted former CEO Jacques Nasser in 2001, repeated his pledge to forgo any new remuneration until Ford's auto unit returns to sustained profitability.

Shareholders voted down a proposal that would have stripped the founding Ford family of much of its voting power, by converting Ford Class B stock to common stock.

The Class B stock, held mostly by Ford family members, allows 16 votes per share compared to one vote per share for regular shareholders. About 23 per cent of votes cast were in favour of equalising voting rights.

Shareholder gadfly Evelyn Davis made an appearance at the meeting and sharply criticised Mr Ford's plans to produce a reality television show featuring car designers. "This is outrageous that the board wants to spend money on a reality show," she said. "Somebody put the wool over your heads."

Bill Ford joked that "sometimes this meeting feels like" a reality TV show, but he said: "We're going to give it a shot. It's something very different for us".

More than 95 per cent of Ford shareholders voted against a proposal to remove sexual orientation from the automaker's equal employment policy.

Ford has an ongoing struggle with a conservative Christian group over its support of gay rights groups and its decision to advertise in gay publications, a move that prompted the American Family Association to boycott against the company.

The two-hour meeting was attended by just over 60 shareholders.