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Ford: No plans to restore dividend

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Ford: No plans to restore dividend



WILMINGTON, Del. -- Despite Ford’s progress, it’s too early to reinstate a dividend, Ford Executive Chairman Bill Ford said today during the company’s annual meeting.

“It is very early days in our recovery,” Ford said. “We still have a lot of debt. If we continue our progress … that will be a topic for discussion.”

Ford discontinued its shareholder dividend in September 2006.

Still, Ford’s turnaround plan is ahead of schedule, Ford President and CEO Alan Mulally said. He said Ford, which reported a $2.1 billion first quarter profit, will continue to improve throughout the year and into 2011.

“We are clearly on a path now of profitably growing the business,” Mulally said.

Ford said the company’s turnaround is different from past turnaround efforts that were driven by rising industry sales and a reliance on incentives to push sales.

This time, Ford said the company has cut its operational costs, reduced inventory and its reliance on incentives.

For the first four months of this year, Ford’s U.S. sales have increased 32.3% – outpacing the industry's 16.7% increase – and the company’s U.S. market share has increased by 2.2 percentage points.

Ford also reported a surprise $2.7 billion profit for 2009 after three years of losses that totaled about $30 billion.

“The fact that we were able to make money last year in the worst car market in 18 years shows that this is different,” Ford said.

Ford’s progress drew mostly praise from the 97 shareholders that attended the company’s annual meeting.

Dean MacArthur, 46, of Ontario, said he began investing in Ford in October and November 2008 when the company’s stock hit a low of $1.23 per share.

"I put it all on the line,” said MacArthur, who has invested a total of $700,000 in Ford stock. “It’s been life changing."

Ford’s stock rose 14 cents to $12.82 per share today from its close on Wednesday and is trading at more than twice its value last year at this time.

MacArthur said he and his wife invested in Ford because they believed in the company’s management team and had a feeling that American consumers would reward the company for surviving without requesting emergency federal loans.

Ford’s shareholders also defeated five proposals submitted by shareholder activists on Thursday, including a proposal that would have abolished a Class B share voting structure that gives the Ford family control over about 40% of the company’s votes.

However, about 29.2% of the company’s shareholders voted in favor of that proposal, up from 19.2% last year. Ford said the increase occurred because it has issued additional stock over the past year that was mostly purchased by large, institutional investors.

Those investors tend to vote against separate classes of voting shares.

The toughest questions for Ford came from Evelyn Davis, a notorious shareholder activist, who chastised Ford for doing business with Goldman Sachs, which is under investigation by the U.S. Securities and Exchange Commission.

Ford CFO Lewis Booth said about 20% of Ford’s investment banking business is with the company, but stressed that Ford does business with most of Wall Street’s largest firms.

"This is the Ford meeting. Not the Goldman Sachs meeting,” Ford said.



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The lack of the dividend is causing me to contemplate selling my F stock. I don't see much growth past $14 a share, so if it gets back there again, it's sold.

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