Ford pay out shareholders for the first time in 5 years 0

Ford has ended a 5 year drought by paying their shareholders. Ford, who is the second largest car producer in America, declared a 5 cent quarterly dividend over the weekend.

This was made possible after the company earned an enormous $1.65 billion in the third quarter of 2011. That in itself was also a record breaker as it was the 10th consecutive quarter in which the company have made a profit.

Ford negotiated a brand new four year contract its 40,600 United States employees after securing a deal with the United Auto Workers establishment.

Bill Ford, the Executive Chairman of Ford said that everyone deserves their fair share of the company’s recent success. He said “The board believes it is important to share the benefits of our improved financial performance with our shareholders,”

“It is an important sign of our progress in building a profitably growing company and our confidence in the future.”

Alan Mulally, the companies Chief Executive Officer is majorly known as the man who helped the companies reach its recent success. He wanted Ford to focus on providing excellent quality within their new models whilst offering better fuel quality. This was especially shown in the new Ford Fiesta as well as the popular Ford Explorer sport utility vehicle.

Over the past two years, Ford have earned $9.28 billion which is a major turnaround since their $30.1 billion loss from 2006 to 2008.

The dividends pay-out will cost the company $200 million per quarter, according to Lewis Booth, Ford’s Chief Financial Officer. The company are said to have made plans to avoid a pay out if the industry turns sour again.

Lewis Booth said “Compared to the past, we’ve substantially restructured the company; our break-even is lower than it was. We would expect this to be a sustainable dividend.”

He did mention after that if the company continues to be successful then the dividend pay outs would be increased.

Bruce Clark, a New York analyst has given his expert opinion from a financial perspective saying the dividend pay amounts are at the expected level. He said “This dividend is consistent with what we expected,”

“In terms of having any real impact on the likelihood or time frame of getting to investment grade, it’s really not going to be a driver.”

“The big drivers are executing their existing operating plan, maintaining strong liquidity and balance sheet and addressing challenges in Europe.”