FoMoCo”s executive chairman Bill Ford Jr. announced this week to shareholders that dividend payments would not be made until the automaker pays off more of its debt. That being said, he also mentioned that shareholders were barely in a position to complain, considering the soar in stock value and the fact that this year ended a 15-year slide in market share and returned to profitability after years of posting record losses.
“This is one of the greatest financial turnarounds in our 106-year history, and I believe a historic turning point for our company — the beginning of a sustained period of profitable growth and product excellence,” Bill Ford told about 100 shareholders at the Hotel DuPont. “You, the shareholders, have benefited from this resurgence after some decidedly lean years.”
Having lost 26 cents per share on Thursday, Ford stock closed the day trading at $12.42; a stark improvement over the $4.71 it was trading at a year ago. Attracting buyers through leveraging their status as the only Detroit automaker to refrain from government support and a solid mix of products has allowed Ford to post profits in the last four quarters.
A timetable for the resumption of dividend payment cannot be determined until debt reduction goals are established and met. Despite its recent profitability, Ford still stands disadvantaged against crosstown rivals Chrysler and GM in that they were unable to shed heavy loads of debt, contrasting the situations of the other two due to their bankruptcies.
– By: Stephen Calogera
Source: Detroit News