Car Advice

Ford share offer raises US$1.4b

By David Twomey |

Ford Motor Company, the US parent of Ford Australia, has raised US$1.4 billion through a 300 million share offer for US$4.75 per share; a move that its chief executive said was an important step toward getting profitable again.

Ford said the proceeds would be used for general corporate purposes, including funding a portion of its obligation to a union-run fund set up for retiree healthcare expenses.

Selling the stock “is another key step in our plan to transform Ford into an exciting, viable enterprise poised to return to profitability,” Chief Executive Office Alan Mulally said in a statement.

Ford Michgian Assembly Plant

Issuing equity now and possibly funding a larger portion of its retiree obligations with cash would help Ford improve its balance sheet and reduce the potential impact of those obligations on its shareholders, Mr Mulally said.

Ford Executives at 2009 Annual Shareholders Meeting

Ford is the only US automaker that has not sought government aid.

Reuters Newsagency says the news came as other US carmakers were dealing with tough times.

General Motors Corp shares have hit their lowest level since the Great Depression and Nissan Motor Co posted a loss and expected more because of the deep global auto downturn.

GM is less than three weeks from a June 1 deadline to reach agreement with its stakeholders to avoid a bankruptcy filing.

The downturn late last month forced Chrysler to seek bankruptcy protection, and has threatened the survival of numerous auto parts suppliers as well.


 
  • adam (aka mada)

    I’ll take a punt and say Ford will be one of the strongest auto compaines in 2 years time.
    Amazing how an excellent CEO can manage a global company during such industry turmoil.

  • Wheelnut

    I agree -Ford will be a stronger car company by the time their restructuring process is complete.

    Hopefully Mulally remains at the helm making the hard decisions and that Ford continues its current trend of introducing a range of new modern looking practical efficient cars that people from all round the world would want – not just Americans…. which is the reason GM got into so much trouble thanks to Rick Wagonner and his ignorant arrogant small-town mindset.

    Thing is the last time Ford had a CEO who had a number of plans etc which could improve the companies image; operations and its profits – he was ousted and Ford Jr Sr Jr an academic with no practical real world experience / knowledge took his place.

  • Shane

    I am very impressed with Ford and how they are clearing all the debt and weight they were dragging around for such a long time. Any company that can emerge from a tough recession will be more efficient, smarter and profitable through the good times.

    I agree, Ford will become a very strong car company in a couple of years.

  • Spitfire

    Sorry to burst your bubble of optimism Ford fanboys, but long before that happens Ford will have gone off to Uncle Sugar cap in hand for a bailout. The barbarians are at the gate.

  • Tom

    At least Ford is trying to avoid requiring a bailout unlike GM and Chrysler who sat on their hands and waited until they were bankrupt before even trying to restructure. That make Ford far more deserving of a government loan than GM ever was, because Ford has already shown it is restructuring to be a viable, profitable manufacturer, with a large range of new, competitive upcoming products, unlike GM who are solely relying on Volt to save them.

  • Andrew M

    Sorry to burst your pessmistic bubble there spit fire,

    But Fords current restructuring plan has been forecast not only by themselves, but industry experts aswell, that ford will get through this slump with out having to tap into any government loans.
    Ford also has very stable market share and increasing share prices which many companies placed above tham in the food chain cant even claim.

    If you actually face some facts you will quickly see how silly you are to be still peddling that same old line of destruction upon Ford.

  • LSD

    Spitfire…..I would hate to burst the bubble of anti Ford fans like you but you are wrong. Ford has good product and will get through this by themselves. The onlly reason Ford would ask for money is if that when GM do go arse up some suppliers might too so it could interupt Ford production.

  • Frontman

    Seeing as we are into bursting bubbles, Spitfire you also seem to be drawn only into the US side of the market. If you take a short trip across the atlantic you will see that FOrd Euro is powering ahead (compared to all others) Having had the Number one seller for the last couple of months and consistantly increasing market share YTD. As well as having the No1 seller in the states for 26 of the last 28 years, Ford is the ONLY manufacturer to have a vehicle inside the top 5 in the Quality ratings and Consumer confidence ratings as well as the EPA consumption ratings in the states.