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Fields says pension costs won't hurt Ford earnings

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Fields says pension costs won't hurt Ford earnings

BY BRENT SNAVEY

FREE PRESS BUSINESS WRITER

Mark Fields, Ford’s president of the Americas, said today the company’s earnings will not be significantly impacted by rising pension costs next year.

His comments, made at a Society of Automotive Analysts event in Southfield, came a day after a Credit Suisse analyst Chris Ceraso said higher pension costs could impact Ford’s earnings by 15 to 20 cents next year.

Ceraso predicted that Ford will face material cost increases and rising structural costs, including a potential $900 million increase in pension expense next year.

Fields, however, said today that “We don’t expect it to have a significant impact next year on our earnings.”

Ceraso also estimated that Ford’s cashcontributions to its pension fund could also move materially higher in 2011 from $1.5 billion to $2.3 billion.

Fields declined to say what Ford’s 2011 pension contribution would be, other than to say it would be funded appropriately.

“Our pension expense for 2011 will increase moderately,” Fields said. “We do not expect, however, any impact on our cash contributions, which we currently expect to be about the same as this year.”

Ford made $4.7 billion in the first half of the year, or $1.10 per share and has posted five straight profitable quarters.

Ford’s stock was trading at $12.32 per share this morning, down 6 cents or 0.4% from its close of $12.38 from its close on Wednesday.

Read more: Fields says pension costs won't hurt Ford earnings | freep.com | Detroit Free Press http://www.freep.com/article/20100923/BUSINESS01/100923043/1210/business01/Fields-says-pension-costs-wont-hurt-earnings#ixzz10P5fV5Vk

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Rising pension costs won't hurt, Ford says

Fields doesn't expect major impact on earnings in 2011

BY BRENT SNAVELY

FREE PRESS BUSINESS WRITER

Ford's earnings will not be hurt by rising pension costs next year, Mark Fields, Ford's president of the Americas, said Thursday.

"Our pension expense for 2011 will increase moderately," Fields said. "We do not expect, however, any impact on our cash contributions."

Fields' comments, made at a Society of Automotive Analysts event in Southfield, came a day after Credit Suisse analyst Chris Ceraso said higher pension costs could trim Ford earnings by 15 to 20 cents per share next year.

Credit Suisse predicted that Ford's pension costs could increase by $900 million next year. Ceraso also estimated that Ford's cash contributions to its pension fund could increase in 2011 from $1.5 billion to $2.3 billion.

Fields said Ford expects to contribute about $1.5 billion to its pension plan in 2011 or about the same as it plans to contribute this year.

"We don't expect it to have a significant impact next year on our earnings," Fields said.

The Dearborn automaker made $4.7 billion, or $1.10 per share, in the first half of this year. For the year, analysts on average expect Ford will earn $1.80 per share, or about $6.1 billion.

For the first eight months of this year, Ford also increased its share of the U.S. market 1.3 points to 17.1%.

Fields said sales in September got off to a great start during the Labor Day weekend and he expects the selling rate will increase this month compared with August.

J.D. Power and Associates said on Thursday that September's seasonally adjusted annual rate, or SAAR, is estimated to be 11.8 million, which would be the highest rate so far this year.

Ford's stock closed Thursday at $12.31 per share, down 7 cents, or 0.6% from its close of $12.38 on Wednesday.

Read more: Rising pension costs won't hurt, Ford says | freep.com | Detroit Free Press http://www.freep.com/article/20100924/BUSINESS01/9240326/1210/business01/Rising-pension-costs-wont-hurt-Ford-says#ixzz10S9m0Nmy

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FIELDS FIRES BACK, SAYS FORD PROFITS WON'T TAKE SIGNIFICANT HIT IN 2011

By Mark Kleis

Earlier this week a report by Credit Suisse, a financial services company based out of Zürich, Switzerland, suggested that Ford would face a $900 million increase in pending fund costs in 2011, as well as increased materials costs, which could in turn reduce profits compared to 2010.

But today Mark Fields, Ford's president of the Americas, said, "Our pension expense for 2011 will increase moderately," while speaking at an Society of Automotive Analysts event. Fields added, "We do not expect, however, any impact on our cash contributions." The Detroit Free Press went on to explain that the Credit Suisse report predicted Ford would see an increase of $900 million from its pension costs, with Ford's cash contributions increasing by $800 million.

According to Fields, Ford will contribute roughly $1.5 billion to its pension plan in 2011, which is the same figure the automaker paid in 2010.

Fields did not specifically address the aspect of Credit Suisse's report that pointed to an increase in material costs that will be shared industry-wide, but Fields did make a point of adding one additional bit of clarification regarding the pension aspect of the report, saying, "We don't expect it [pension costs] to have a significant impact next year on our earnings."

Reading between the lines from Field's ambiguous explanation of the $1.5 billion contribution to the pension for 2011, it appears as if Ford is in fact expecting an increase in pension costs next year, albeit significantly lower than predicted by outsider Credit Suisse.

LINK:

http://www.leftlanenews.com/fields-fires-back-says-ford-profits-wont-take-significant-hit-in-2011.html

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