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In a sign that the economy in the United States is improving, Ford announced today that it’s going to re-start its quarterly dividend program. This is great for auto news. For the first time in years Ford will pay its quarterly dividend and this move is a sign that Ford hopes to rebuild its image with its beleaguered investors who have weathered the storm of the economic recession. Alan Mulally, Ford’s chief executive is behind this move and has been the architect of Ford’s game plan to stay alive since 2006 when it was sinking faster than a sinking ship. When he was hired, Mr. Mulally approved Ford’s borrowing $23.5 billion dollars to fund its restructuring plans which has helped to keep the company and brand alive during the recession. A Commitment to the Future With the announcement that the dividend plan would be reinstated, Lewis Booth, Ford’s CFO announced its commitment to the dividend program by stating that it would keep it going even if the United States economy experienced another downturn. Mr. Booth assured investors that Ford ran “stress tests” to insure that the company would have enough cash to continue making dividend payments every quarter no matter what happens to the economy. "We wanted to make sure that this is sustainable," Lewis Booth said about the dividends. "We have substantially restructured the company," and officers think it can remain profitable even were auto sales to plunge. Future Plans By March 1st Ford will pay dividends of around five cents a share. Some industry experts were unhappy at this news including Brian Johnson, Barclay Capital’s senior equity analyst “"We had been expecting eight cents [a share, so this is a bit below that range,". Even though the dividends are below expectations, it’s a positive step that Ford is returning to its days of being the bedrock blue chip stock that it used to be. By Friday afternoon, shares of Ford stock were down eight cents to $11 a share by the encouraging news is expected to lift Ford’s stock price and help the company to see even more gains in the coming year. Ford continues to be a strong brand and has earned over $6 billion dollars this year. The company hopes to also resume its former debt rating that was once investment grade. If they can pull this off, investors around the world will be able to once again buy Ford’s stock for their mutual funds, retirement fund and investment accounts.
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