Jump to content

Ford Cuts Dividend


Recommended Posts

Higher than expected material prices before Ford has been able to reduce labor overhead would be my guess where the squeeze is coming from.

 

Also necessity is a difficult thing to assert, when you're talking about .2% of overall revenue. Heck, I think Nickf1011's flip remark tying the extended warranty to the dividend reduction might have some truth to it. Increasing the warranty will increase warranty costs. So..... Why not pull that money from the dividend? Instead of pulling it from marketing budgets or elsewhere? Ford sells 3M vehicles a year in the U.S. $350M means a budget of roughly $100/car/year in added warranty costs, which I think is a reasonable allowance.

 

Might yes, in fact probably... however no one wants to extend their warranty unless they feel they have to (Toyota and Honda included), in my opinion it still comes down to things now going as well as planned and something needing to be done.

 

I still don't have pity for investors though... that's a risk you take, I'm sorry to say.

Link to comment
Share on other sites

I view cutting the div as a plus. It means to me Ford finally realizes the business needs (and can use) the money more than investors. I know they hate to cut the income of the "so called" little old lady investors who supposedly live off the income, but they made a business decision...finally. IMHO they should have eliminated the div for a few years.

 

During the next recession, when Ford stock probably completes it's run toward the toilet, I'm going to buy a bunch. The company has substantial assets. The risk, of course, is for the common shareholders to be wiped out in a voluntary reorganization (bankruptancy) while the bond holders wind up with the assets.

Edited by Ralph Greene
Link to comment
Share on other sites

I view cutting the div as a plus. It means to me Ford finally realizes the business needs (and can use) the money more than investors. I know they hate to cut the income of the "so called" little old lady investors who supposedly live off the income, but they made a business decision...finally. IMHO they should have eliminated the div for a few years.

 

During the next recession, when Ford stock probably completes it's run toward the toilet, I'm going to buy a bunch. The company has substantial assets. The risk, of course, is for the common shareholders to be wiped out in a voluntary reorganization (bankruptancy) while the bond holders wind up with the assets.

 

Wouldn't the Ford family lose control of the company if it ever declared bankruptcy?

Link to comment
Share on other sites

Since all current stock would be worthless, not only would they lose control of the company, but they would also lose a lot of money as well.

 

 

That is why as the stock price goes down the family must make a descision about going private.

 

There is another variable investors are neglecting to consider; how much money does the family have outside of FMC and how much would they be willing to put back in, to keep the company afloat or go private with?

Edited by foxrun
Link to comment
Share on other sites

"If the stock gets cheap enough" :blah:

 

Yes, when the stock gets cheap enough, it is time to look at other ways to extract value from a company. The low stock price means that the company is unable to use its assets to create a return on investment. It is time to redeploy the assets to other more profitable uses.

 

Ford is controlled by the Ford family. Anyone that buys Ford stock without being fully aware of this fact, with money they cannot afford to lose should be pitied for their ignorance, not their fate.

 

Yes, the Ford family is not stupid either. I am sure they they too realize that their money is being poorly used. And as to the dividend, who do you think the largest recipients of the dividends might be?

 

As to the company being "through" because the dividend is cut. Well Gee, aside from the whole 'jumping to conclusions' thing, I guess I always thought the first responsibility of the company was to stay in business, not to give money away to people that sit on their butt.

 

In mature industries, like auto manufacturing, the dividend is an indicator of the companies ability to make a continuing profit. While staying in business seems like a noble goal, the people who own the money invested in the company do so not to create employment, but to make a profit. A continuing, but unprofitable business is a waste of time and resources. Richard, do you really believe that dividends are simply gifts to lazy people? The only money I know of that Ford gives to people who sit on their butts would be to those who are in the gen pool, and I agree with you that this is a practice which Ford should curtail.

 

Nothing like whining about overpaid labor out of one side of your mouth while complaining about the elimination of a dividend that you do nothing to earn out the other side of your mouth.

 

Time for a touch of reality. Ford and GM are saddled with a cost structure that is killing them. The level of volume that they need to float the current cost structure has not been attainable for several years. The Way Forward is really just an accelerated version of the course that they were already on. Remember the promises of huge cost savings the last time the stock was under $7? It is hardly a breakthrough to consider that the costs are out of hand. Ford and GM both have been unable to develop the compelling products that might create the volume sales they need. Regardless of what assets they have used to develop new products, the results are obvious, the products do not exist. Ford is making it very clear that they know they have a product problem. My sole speculation regards their ability to create these great new products in a timely basis. My point is that cost cutting has eroded the product development capability irreparably.

 

yeah yeah yeah, we know, you're a 'real' owner of Ford. And yet, somehow, I figure there are a lot of people with more at stake in the survival of Ford than you. If Ford puts their interests ahead of yours, and if Ford decides that they don't care about the stock price, I guess that's their prerogative. You don't like it? Run for a seat on the board.

 

You are right, I have nothing at stake in the SURVIVAL of Ford. I could care less. I do have a stake in the survival and growth of my investment in Ford. It would be nice if my investment grew through Ford's efforts as a car company, but that is my only interest in its survival. Nice, not necessary. You think for some reason that there is a mythical beast called Ford that has it's own interests. Sorry, no such animal. Ford is the sole property of the investors that own the company. If the managers at Ford become confused about whose interests they serve they will have to answer for that.

 

There are three distinct stock holding groups. The Ford family. the institutional investors, and the individual investors. When the Ford family has the institutional investors in their pocket, they are unbeatable. When the institutional investors are unhappy, they swing the entire argument. The institutional investors are not happy, the individual investors are not happy, and I doubt that the family is very happy either. I doubt that I will run for a seat on the board, but I am pleased that you grasp how this works. There are already unhappy board members.

 

Finally, It seems that you did not read my entire post I closed in saying that the $.05 cut was trivial compared with the drop in the stock price. It's the stock price, not the dividend, that is cause for concern. The significance of the dividend cut is what it tells about the future of the stock price. Should you actually believe that the stock price is inconsequential to the welfare of the company, be my deluded guest.

 

Perhaps if you had chosen to explain why you believe that a lower dividend would cause the stock price to increase, your post would have been meaningful. It is good to know that you do not expect any return on your investments. Given your sentiments I would be happy to handle your money for you. I would be certain not to disappoint.

Link to comment
Share on other sites

Finally, It seems that you did not read my entire post I closed in saying that the $.05 cut was trivial compared with the drop in the stock price. It's the stock price, not the dividend, that is cause for concern. The significance of the dividend cut is what it tells about the future of the stock price. Should you actually believe that the stock price is inconsequential to the welfare of the company, be my deluded guest.

 

Perhaps if you had chosen to explain why you believe that a lower dividend would cause the stock price to increase, your post would have been meaningful. It is good to know that you do not expect any return on your investments. Given your sentiments I would be happy to handle your money for you. I would be certain not to disappoint.

Well, style points for shouting in bold, instead of all caps.

 

As to the wonderful idea that the company exists primarily to provide a return to its investors, I'm sorry to say that economic theory went out with child-labor, Ludlow Colorado, and the Triangle Shirtwaist fire.

 

Of course, ROI is important, however, it is manifestly not the most important thing. If it were, then every industrial company out there should immediately halt all manufacturing activity and move directly into high margin financial services (elsewhere I have argued that Ford should pursue a strategy of steady organic growth at Ford Credit in order to strengthen a very well run high margin side of their business--the idea that Ford should ignore growth potential in the financial services sector because they view themselves as an auto manufacturer seems rather short sighted). The need to maximize ROI needs to be balanced with the ability to invest in new products in order to maintain (or eventually grow) present ROI.

 

Do I regard dividends as nothing more than payments to lazy people? I would state that someone whose only stake in the company is a certain number of shares that can easily be liqudiated has no standing to complain about dividend cuts when other stakeholders are affected.

 

Furthermore, you say that cost structures have 'irreparably damaged' Ford's ability to develop new products, yet Ford continues to have the highest R&D budget in raw numbers and as a percentage of overall revenue of any full-line auto manufacturer. Quite obviously, there have been problems. Quite obviously money is not one of them.

 

Oh, and thanks for the "Ford is the sole property of the investors that own the company" reminder. I wonder. Have you ever been able to find a bankruptcy judge that agrees with that? If Ford is your property, I think you'll find the title to be quite encumbered at this point. Or better yet, why not get while the gettin's good. If you've got $1200 in holdings, why not go down to WHQ and help yourself to a computer. It's your computer, after all.

 

There are elements of truth in the party-line argument you've provided. I won't argue that. However your stereotypical investor view of a company's obligations is no more valid than that of its unions its board, or its executives. All equally distort the truth to further their own interests, not the best interests of the company (which are almost always a compromise of all these dogmas, seeing that the company is not just the sum of its investors, nor its union employees, nor its white collar employees, nor its executives, nor its board)

Edited by RichardJensen
Link to comment
Share on other sites

Why would the Ford family take the company private? They already control it.

 

 

What about Pioneer's question? (wouldn't the Ford family lose control if Ford went bankrupt?) or would they keep things afloat with their outside money?

Edited by foxrun
Link to comment
Share on other sites

What about Pioneer's question? (wouldn't the Ford family lose control if Ford went bankrupt?) or would they keep things afloat with their outside money?

Addressed under another thread: no need for the family to take it private, they already control it. The family would likely take it private only when a Ch. 11 filing seems inevitable, that is, if they wanted to have anything at all to do with the company that would be left after the filing. Going into Ch. 11 in the current situation would wipe out the family's voting trust (as well as all the common stock that they own). In other words, they'd lose the company.

Edited by RichardJensen
Link to comment
Share on other sites

Addressed under another thread: no need for the family to take it private, they already control it. The family would likely take it private only when a Ch. 11 filing seems inevitable, that is, if they wanted to have anything at all to do with the company that would be left after the filing. Going into Ch. 11 in the current situation would wipe out the family's voting trust (as well as all the common stock that they own). In other words, they'd lose the company.

 

So are you saying it would be cheaper for the family to go private after ch.11? And or would it be better for whatever reason (cheaper most likely) to keep the statis quo going, with their outside money(autonews says Bill is worth $46million but I'm sure there is more and collectively{the family} there is alot more?

Edited by foxrun
Link to comment
Share on other sites

So are you saying it would be cheaper for the family to go private after ch.11? And or would it be better for whatever reason (cheaper most likely) to keep the statis quo going, with their outside money(autonews says Bill is worth $46million but I'm sure there is more and collectively{the family} there is alot more?

No, I'm saying that the family would not take Ford private UNLESS a chapter 11 filing seems inevitable. If that's the case, taking the company private ahead of a Ch. 11 filing is the only way to retain family control.

 

It would definitely be preferable to keep the status quo. Ford is not severely cramped for operating capital.

 

BTW, I think the 5/60 powertrain is a good compromise. The 10/100 powertrain warranty is doable only if most of your transactions occur in dollars and most of your manufacturing expenses are paid in won. Besides, for fullsize SUVs and pickups, this is the best warranty you can get.

Link to comment
Share on other sites

Something else that people seem to be missing is the fact that Dividends in common stocks have been going out of vogue for a while now. Compare the stock market of today with the market of 30-40 years ago. Back then, most issues paid some sort of dividend. Today, I think the figure is something south of 20% of the traded shares represented by the NYSE are dividend paying shares.

 

I almost think that it would be advisable for Ford to do a buyback and re-issue of another classification of share. There would be common shares and then a preferred share with only the preferred share paying the dividend. But, that's the marketing side of my brain and not the investor side.

 

While it is never a wholely positive signal for a company to reduce or eliminate the payment of dividends on its shares, in Ford's case, I see it as a "sensible" move that should have been anticipated years ago when the stock went into freefall and their US profits evaproated. Anyone that didn't see this coming was either delusional or knew nothing about the modern auto market.

Link to comment
Share on other sites

I almost think that it would be advisable for Ford to do a buyback and re-issue of another classification of share. There would be common shares and then a preferred share with only the preferred share paying the dividend. But, that's the marketing side of my brain and not the investor side.

That would be prefereable for people like xr7g428, however it does little for anyone besides the investor (the reason why no company ever got anywhere by paying too much attention to investors). Also, at this time, a preferred stock issue would be rather less attractive, as the only 'preference' you get is with the distribution of equity in the event of liquidation. Preferred stockholders can't vote (as a general rule), and have senior status to common stockholders only in the event of liquidation and payment of dividends.... If you want a piece of Ford that pays a decent dividend, you should buy their bonds.

Edited by RichardJensen
Link to comment
Share on other sites

Well, style points for shouting in bold, instead of all caps.

 

As to the wonderful idea that the company exists primarily to provide a return to its investors, I'm sorry to say that economic theory went out with child-labor, Ludlow Colorado, and the Triangle Shirtwaist fire.

 

Of course, ROI is important, however, it is manifestly not the most important thing. If it were, then every industrial company out there should immediately halt all manufacturing activity and move directly into high margin financial services (elsewhere I have argued that Ford should pursue a strategy of steady organic growth at Ford Credit in order to strengthen a very well run high margin side of their business--the idea that Ford should ignore growth potential in the financial services sector because they view themselves as an auto manufacturer seems rather short sighted). The need to maximize ROI needs to be balanced with the ability to invest in new products in order to maintain (or eventually grow) present ROI.

 

Do I regard dividends as nothing more than payments to lazy people? I would state that someone whose only stake in the company is a certain number of shares that can easily be liqudiated has no standing to complain about dividend cuts when other stakeholders are affected.

 

Furthermore, you say that cost structures have 'irreparably damaged' Ford's ability to develop new products, yet Ford continues to have the highest R&D budget in raw numbers and as a percentage of overall revenue of any full-line auto manufacturer. Quite obviously, there have been problems. Quite obviously money is not one of them.

 

Oh, and thanks for the "Ford is the sole property of the investors that own the company" reminder. I wonder. Have you ever been able to find a bankruptcy judge that agrees with that? If Ford is your property, I think you'll find the title to be quite encumbered at this point. Or better yet, why not get while the gettin's good. If you've got $1200 in holdings, why not go down to WHQ and help yourself to a computer. It's your computer, after all.

 

There are elements of truth in the party-line argument you've provided. I won't argue that. However your stereotypical investor view of a company's obligations is no more valid than that of its unions its board, or its executives. All equally distort the truth to further their own interests, not the best interests of the company (which are almost always a compromise of all these dogmas, seeing that the company is not just the sum of its investors, nor its union employees, nor its white collar employees, nor its executives, nor its board)

 

Well, Ford can ignore investors...and they can ignore Ford the next time it needs capital.

 

It's like saying that an automobile company isn't run solely for the benefit of customers. Which is true - to a point. The big problem is that customers aren't captive to any particular company...they have other options when it comes time to purchase a new vehicle.

 

Ford, GM and the UAW are finding out firsthand how that one plays out in the real world.

 

Like it or not, not all constituencies are equal, regardless of whatever theory or dogma one believes.

Link to comment
Share on other sites

So, RJ, does Ford's reduction in dividend payouts then make their bonds more attractive? Is this a subtle way of trying to improve their bond status?

Actually, anything that results in a disproportionate decline in near-term Ford notes, makes them more attractive. It is extremely unlikely that Ford will be in a position where they will be unable to service their debt. However it is also extremely difficult to buy a Ford bond.

 

This is not a subtle way of trying to improve their bond status, as higher bond prices don't benefit Ford.

Link to comment
Share on other sites

That would be prefereable for people like xr7g428, however it does little for anyone besides the investor (the reason why no company ever got anywhere by paying too much attention to investors).

 

First of all, my intent is not to shout in bold type, style points aside, but to make it easier for the reader to follow the discourse. I am open for recommendations that are more pleasing. Now to the point.

 

Can you provide a list of companies that routinely ignore the interests of investors and succeed? For some reason you must believe that the interests of investors are some how at odds with the best interests of the company.

 

I think that there is an important distinction that is not being made between investors, and speculators. Investors have a long term out look. Speculators are looking for the quick jump in stock price. Investors want the company to grow organically and increase in value as a result of that growth. Speculators are looking for any thing that can drive the stock price up in a hurry without regard to long term consequences. I have held Ford stock since 1975.

 

 

Also, at this time, a preferred stock issue would be rather less attractive, as the only 'preference' you get is with the distribution of equity in the event of liquidation. Preferred stockholders can't vote (as a general rule), and have senior status to common stockholders only in the event of liquidation and payment of dividends....

 

This is not entirely correct. The following is excerpted from the Ford annual report.

 

NOTE 18. CAPITAL STOCK AND AMOUNTS PER SHARE

 

All general voting power is vested in the holders of Common Stock and Class B Stock. Holders of Common Stock have 60% of the general voting power and holders of Class B Stock are entitled to such number of votes per share as would give them the remaining 40%.

 

Shares of Common Stock and Class B Stock share equally in dividends, with stock dividends payable in shares of stock of the class held. If liquidated, each share of Common Stock will be entitled to the first $0.50 available for distribution to holders of Common Stock and Class B Stock, each share of Class B Stock will be entitled to the next $1.00 so available, each share of Common Stock will be entitled to the next $0.50 so available and each share of Common and Class B Stock will be entitled to an equal amount thereafter.

 

As discussed in Note 16, Trust II Preferred Securities with an aggregate liquidation preference of $5 billion are outstanding. At the option of the holder, each Preferred Security is convertible, at any time on or before January 15, 2032, into shares of our Common Stock at a rate of 2.8249 shares for each Preferred Security (equivalent to a conversion price of $17.70 per share).

Conversion of all shares of such securities would result in the issuance of 282 million shares of our Common Stock.

 

Basically, Class B stock is held by the Ford family. They get at least 40% of the vote regardless of the number of shares they hold. When you say that the Ford family controls the company, this is what you are talking about.

 

I think the part about liquidation speaks for itself... And of course nobody is going to convert those securities at $17.70 a share. And no one is going to buy any more of them either... Pesky investors.

 

If you want a piece of Ford that pays a decent dividend, you should buy their bonds.

 

Ford is in the junk bond business right now so they do HAVE to pay a premium on their bonds... Pesky investors.

 

I think this is a good point for discussion. Maybe this is the source of misunderstanding from my original post. Investors look to all forms of a stocks possible return, dividend and change in share value. Where the likelihood of change in value is limited, or very slow moving, the dividend is more important. In mature industries, With a very mature company, like Ford or GM, The dividend yield is vital to the valuation of the stock. As a quick and dirty example, when Ford stock is at $8.00 and the dividend is $.40 annually then the return on the dividend is 5%. If the share price increases by another 5% then the total yield would be 10%. Investors will be happy with no dividend where there is a likely possibility that the share price will rise by AT LEAST 10%. The situation at Ford is that there is little on the horizon that would indicate that the stock price will rise. We could argue this point I suppose, as this is where you have to make your judgement call.

 

When a company drops it's dividend to fund the development of a new product that will really grow the business, then investors really can see the advantage they get from the expected growth. This is where Ford has failed to paint the picture. It appears that they are cutting the dividend as a cash flow survival tool, not as investment in future growth. In this scenario, it looks like they feel like the stock should be $4.00 paying a $.20 dividend for a 5% return.

 

I might be willing to consider that the extended warranty would buy some growth, and therefore be worth some investment on my part (reduced dividend), If Ford were forthcoming with the expected sales results.

 

Let me attempt, again, to make this clear. For investors, the entire dividend is not the issue. It is what it means when Ford cuts the dividend without a plan for how they will use the money to grow the business, and thereby the value of the stock. It is the drop from $15 and better that hurts, not the $.05! Ford has a market valuation more typical of a popsicle stand than number 5 on the Fortune 500! This is why there is talk of going private. If the company does have a chance for long term growth and survival, it is incredibly under priced. IF Ford can actually build a hydraulic hybrid Expedition that gets even 40MPG, (I have heard claims of 60!) then this could be a $30 stock again. That they spend a lot on R&D is nice, but unless they produce results, it is just more bad management.

Link to comment
Share on other sites

"For investors, the entire dividend is not the issue. It is what it means when Ford cuts the dividend without a plan for how they will use the money to grow the business, and thereby the value of the stock. It is the drop from $15 and better that hurts, not the $.05!"

 

This is mainly what I'm concerned with as well and what I feel most analysts took from the dividend cut. Without specifying how the additional $237M in yearly savings would be spent to help the business & thus hopefully increase stock price, the shareholder is left guessing as to what Ford plans to do with that money. That doesn't build confidence & I think that's mainly what so many analysts reacted to. Personally, I'd just like to hear Ford managment say specifically how they will use this money to help the turnaround & when they expect SUV sales to level off & at what percent they expect market share to stabilize at. I think specific response to those questions might stave off a lot of the negative perception people have of FoMoCo going from bad to worse lately & the dividend cut only seemed to further fuel that mindset.

Link to comment
Share on other sites

"Can you provide a list of companies that routinely ignore the interests of investors and succeed? For some reason you must believe that the interests of investors are some how at odds with the best interests of the company."

 

Ideally, all stakeholders from investor to customer are benefited by the way a healthy corporation is run. Each stakeholder, from investor to customer, needs to be taken care of. Periodically, however, it becomes necessary to revisit the various weights that investor, employee, supplier, and customer needs are assigned. In a time when cuts are being made to employee benefits and employee totals, it seems logical to revisit the weight assigned to the interests of the investors. I don't think that Ford needs to account for where the dividend money is being spent, anymore than they need to account for where they spend the nickel they save on a sparkplug. Sure it would be helpful if Ford said "We are using this money to help offset additional warranty expenses that will be incurred with our new warranty program", but it would also be helpful if Ford gave automotive journalists a tour of their future product plans. Both measures might provide a measure of confidence. Neither would materially alter the way the company does business.

 

Also, the family's Class B stock is not 'preferred' in the typical sense.

 

"Ford is in the junk bond business right now so they do HAVE to pay a premium on their bonds... Pesky investors."

 

Actually, I was talking about the discount on publicly traded Ford bonds that have already been issued. Since you get a higher yield the lower the bond's market price, you can get a fairly high yield on a fairly secure bond. Only problem is the ridiculous price that brokerages usually assign you when you buy bonds from their inventory (or has that changed--it's been a while since I really paid attention to this).

 

I'm sure you're aware that one of the reasons why Ford has been able to hold onto Ford Credit is because they have not lost as much cash over the last several years, in comparison to GM. Also, Ford Credit issues a ton of ABSes that carry exceptionally high credit ratings. I have not compared Ford Credit to GMAC lately, but I do believe that Ford Credit is much better at financing their ongoing operations at low rates, despite the junk status that they carry.

 

Apart from all that, my theory is that Jac Nasser had the right idea, but he was an idiot. My belief is that one of the best things Ford could do for their automotive operations would be to remove the pressure on those operations to furnish the lion's share of profit and revenue for the corporation. At best Ford can hope for high single digit margins on the automotive side. On the other side of the company, however, you have Ford Credit--the best run financing arm in the industry. My idea is to gradually expand Ford Credit's business through natural outgrowth (equipment leases, commercial financing, commercial credit, consumer banking) of areas where they already have strong presences (leasing, commercial and consumer loans).

 

The emphasis would not be doubling Ford Credit profit and revenue in five years, but to continue to grow sustainably.

 

Furthermore, the U.S. auto market is mature, there is little opportunity for growth here (as in W. Europe), but in both the U.S. and Europe, there wil continue to be a demand for financial services, and Ford Credit can position itself as a viable alternative to commercial credit and leasing services as offered by GE and others.

 

Family control of the company would effectively rule out the shortsighted idea of spinning off one unit, as the family would (or should) put the long term interests of both sides of the company ahead of the pressure to generate a lot of investor wealth from a spinoff of Ford Credit.

Link to comment
Share on other sites

This is kind of what I was hoping for from ford in the long run. Make the automotive operations do slightly better than break even, but make products that were good enough to be desirable at a passable interest rate from Ford Credit so that you don't have to use 0% financing as a lure. Ford credit still likely finances the lion share of Ford vehicles sold under financing arrangements of one type or another. If it sells for cash, well, there's no long term risk to factor in and you've made the money up front.

 

As for diversifying Ford Credit, I like the idea, but, it must be done very carefully so as to avoid jeopardizing the arm as a whole and so that it doesn't disrupt the liquidity rules that Ford credit currently operates under. Personally, though, I'd like to see them make an experimental and CONTROLLED forray into Factoring (indirect lending, recievables financing, whatever you want to call it). I used to work for a bank that had a factoring department and, even though the amount of the bank's total size that that department made up, it made obscene amounts of money on a slightly higher risk basis than standard bank fare.

Link to comment
Share on other sites

I don't see a strategy of relying on Ford Credit for profits working well in the long run. Essentially that is what GM has been doing the last few decades, selling widgets and making money financing them. That only works when people actually want to buy what you sell, and to avoid going around full circle, I'm just going to say that to sell what needs to be sold, you need to have truly desirable, appealing product, which requires a focus on product.

 

If Ford was to plan making money by financing cars, they might as well just stop making cars and work out a contract with someone else - that way they can astronomically increase ROI, eliminate the hassle of building cars, of holding them as inventory, of maintaining a dealer network, of dealing with warranties and R&D. In other words, if that is the plan, cut the crap and just sell the financing, dont churn hundreds of billions building vehicles simply to sell loans.

 

No company has been successful in the long run selling something simply to finance it. The economy already has businesses that specialize in financing, assuming the risk of loans as overhead. Some of these have much deeper pockets than Ford Credit, have access to cheaper capital, to the point where competing with Ford as a credit provider would probably be quite easy.

 

The way out of this mess is still the same basic point that is repeatedly made: product needs the area of focus, after which everything else follows.

Link to comment
Share on other sites

"If the stock gets cheap enough" :blah:

 

Ford is controlled by the Ford family. Anyone that buys Ford stock without being fully aware of this fact, with money they cannot afford to lose should be pitied for their ignorance, not their fate.

 

As to the company being "through" because the dividend is cut. Well Gee, aside from the whole 'jumping to conclusions' thing, I guess I always thought the first responsiblity of the company was to stay in business, not to give money away to people that sit on their butt.

 

Nothing like whining about overpaid labor out of one side of your mouth while complaining about the elimination of a dividend that you do nothing to earn out the other side of your mouth.

 

yeah yeah yeah, we know, you're a 'real' owner of Ford. And yet, somehow, I figure there are a lot of people with more at stake in the survival of Ford than you. If Ford puts their interests ahead of yours, and if Ford decides that they don't care about the stock price, I guess that's their prerogative. You don't like it? Run for a seat on the board.

:soapbox::soapbox:

 

What's stopping you from doing it?

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

×
×
  • Create New...