Ford CEO Alan Mulally, who restored the dividend to the delight of the Ford family, apparently has a job for life.
The Board of Directors of Ford Motor Company [NYSE: F] declared a first-quarter dividend of $0.10 per share on the company’s outstanding Class B that the family controls as well as common stock. This doubles the $0.05 dividend paid in each quarter of 2012, and puts pressure on GM to declare a dividend for the first time since it emerged from bankruptcy.
Ford is expected to report record earnings for 2012 later this month, AutoInformed predicts because it made more during the first three quarters of 2012 than it did during all of 2011. Through September of 2012, Ford also increased its liquidity position by $2 billion and generated 10 consecutive quarters of positive Automotive operating-related cash flow. (Read AutoInformed Ford Motor Posts $1.6 Billion Profit in Q3. Europe Loses $468 Million)
The balance sheet is weakened by unfunded pension liabilities. Ford had $15.4 billion in underfunded pension liabilities at the end of 2011; including $9.4 billion in the U.S. Ford is in the process of closing many of its pension plans to new entrants and looking at “other actions” to move this huge liability off its balance sheet. Ford says it will be years before its pension plans are fully funded, but will not say if it is considering changes in its U.S. hourly pension plan covered by a new 4-year UAW contract. (Ford Motor Company Posts 2011 Profit of $8.8 Billion)
“Our ability to double our dividend in one year is a testament to our One Ford plan, which has enabled us to maintain a solid balance sheet, while at the same time growing our business to provide our shareholders with more return on their investments,” said Bob Shanks, chief financial officer, Ford Motor Company.
The first-quarter dividend is payable on 1 March 2013 to shareholders of record on 30 January 2013. Ford reported a full year operating profit of $8.8 billion in 2011, an increase of $463 million from 2010. Gains in North America and Ford Credit offset large losses in Europe and Asia.
