Higher dividend and spending at Ford included in mid-decade plan

Article by Anita Panait, on August 16, 2013

Ford Motor Co. has unveiled a more ambitious mid-decade plan that entails a higher dividend and a 25-percent surge in capital spending as it bids to benefit from the growing demand for vehicle around world. Ford Chief Financial Officer Bob Shanks remarked in a presentation at an analysts conference sponsored by J.P. Morgan that the plans will enable the carmaker sustain an investment grade credit rating “through the inevitable downturn to come."

Ford has revised its expected mid-decade capital expenditures upwards from the previous $6 billion to around $7.5 billion. Shanks remarked that Ford is taking its capital spending to higher levels because the carmaker believes that it has “a lot of momentum and some really, really great growth opportunities” to invest in.

Ford wants to return more capital to shareholders in the form of a dividend that would surge with its earnings and could be sustained even during an economic downturn. Ford resumed paying a dividend in 2012, and doubled the per-share amount to 40 cents in the first quarter of 2013.

According to Shanks, the carmaker is bracing itself for cyclical economic downturns by gaining a current average of $20 billion in automotive gross cash, and --with revolving credit facilities -- around $30 billion in total automotive liquidity.

Ford tapped over $23 billion in credit in 2006, allowing it to fend off bankruptcy during the 2009-2010 economic downturn. Its Detroit rivals General Motors and Chrysler, underwent government-sponsored bankruptcies.

Ford reiterated a budget of $5 billion for pension contributions in 2013, expecting to contribute between $2 billion and $3 billion to fund pension plans annually from 2014 to 2016. According to Shanks, Ford is reiterating its target of fully funding its global funded pension plans by mid-decade. [source: Reuters]

Topics: ford, plan

If you liked the article, share on:

Comments

Recommended

In September 27, 2016, Porsche initially filed for a patent that is the “Unique Active Rear Diffuser”. And earlier this week, on April 27, 2017, the United States Patent and...
by - April 29, 2017
The Insurance Institute for Highway Safety (IIHS) has given its Top Safety Pick+ award to the redesigned version of the 2017 Kia Cadenza. This was a result of excellent a...
by - April 29, 2017
It’s pretty neat if you possess something of an extraordinary breed like, say, the Pagani Huayra. There are after all just a total of 100 units ever been built by...
by - April 28, 2017
If you’ve ever visited an arcade, chances are you have already seen a Logitech G920 wheel. If that doesn’t ring a bell, it’s the steering wheel that you use when...
by - April 28, 2017
Toyota Motor Corporation disclosed that it will be bringing two of its Mirai fuel cell vehicles to China by October of this year. Tests will then be conducted on these...
by - April 28, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries