Ford Announced Extra $1 Billion Dividend
Ford Motor Inc.is expecting a record for its 2015 pretax profit. Therefore, the company announces to pay extra dividend of 25 cents a share, returning $1 billion to investors.
Bloomberg reported the extra dividend as an addition to a continued 15 cent quarterly dividend. The company also mentioned the 2016 to be as good as last year or better.
Ford has been the automaker for more than 100 years since its founding in 1903. Together with two other American car makers, General Motors and Chrysler, Ford becomes the world leader in the automotive industry for decades until 1980's.
The oil crisis of the 1970's hit American auto industries really hard and open a window of opportunity for Japanese car to take over the market. In 1980's Japanese car was able to surpass American product with its highly fuel efficient car. Somehow Ford was able to manage the crisis and survive.
Ford's agility has made the company persevere in facing crisis. Its capability to change is remarkable, as it also has managed to get out of 2005 crisis when its corporate bond was downgraded to junk status. Mark Fields was then appointed the new CEO with main assignment to return Ford to profitability.
Mark Fields made some very difficult decisions in resizing the overweight company in 2006. He discarded unprofitable and inefficient business models and consolidating production lines, as well as closing 14 factories and cutting 30,000 jobs. Nevertheless, Mark Fields' strategy made Ford became efficient and its North American operation started to gain profit, along with its international operation in Europe, Asia Pacific and Africa.
The company also said to expect North America to sustain its strong performance in 2016 with an operating margin of 9.5 percent or higher. Reuters reported that beside North America, Ford also expects its Europe, Middle East & Africa, and Asia Pacific operations to all be profitable in 2016. Ford is expecting to record a $10 billion to $11 billion profit of 2015.
Mark Fields, Ford CEO said, "As we close out 2015, we are benefiting from six consecutive years of consistently strong results, and our performance is allowing us to reward our shareholders." Furthermore, he added, "In 2015, we achieved a breakthrough year as promised. For 2016, we're looking forward to delivering another outstanding year."
Business Insider noted that the supplemental cash dividend reflects the company's strong financial performance in 2015 and robust cash and liquidity levels.
Ford will give further details regarding the extra divident at the Deutsche Bank Global Auto Industry Conference on Tuesday.