After its third consecutive profitable year, automaker Ford will resume paying out dividends of five cents a share on March 1st.
Ford suspended dividends in 2006, but remained the only automaker of the big three not to declare bankruptcy. In a conference call with press, Ford’s CFO Lewis W.K. Booth indicated that the time was right to resume the practice and that the company is already looking at increasing the dividend. Booth said:
“The shareholders who have invested in us need to get a return on that investment. As our business improves and our results improve, we’ll continue to look to see if we can increase the dividend.”
Booth also commented:
“Building a strong balance sheet that supports our growth plans remains a core part of our One Ford strategy. We have demonstrated our capability to finance our plans and we are confident that we can begin to pay a dividend that will be sustainable through economic cycles.”
Ford’s executive chairman, William Clay Ford Jr., said in a statement:
“We have made tremendous progress in reducing debt and generating consistent positive earnings and cash flow. The board believes it is important to share the benefits of our improved financial performance with our shareholders. We are pleased to reinstate a quarterly dividend, as it is an important sign of our progress in building a profitably growing company and our confidence in the future.”
In October, all three credit rating agencies upgraded Ford after successful negotiations with the United Automobile Workers union for a four-year-long labor agreement, which some analysts credit with allowing the company to reinstate the dividend. It is predicted that Ford dividends will increase in 2012.