The Ford family, which controls the US's second-biggest automaker Ford Motor, will be a main beneficiary of the family business’s decision to resume paying dividends to its shareholders.
For the first time in five years, the Dearborn, Michigan-based company said it will restart paying quarterly dividends to its shareholders because of increased signs of financial strength.
The quarterly dividend, suspended in September 2006 following a series of quarterly losses, was fixed at $0.05 a share and will be paid on 1 March.
“We have made tremendous progress in reducing debt and generating consistent positive earnings and cash flow,” said family member Bill Ford, the group’s executive chairman, in a statement released on 8 December.
“The board believes it is important to share the benefits of our improved financial performance with our shareholders,” he added.
The payout will total about $200 million (€149.5 million) every quarter, chief financial officer Lewis Booth said in a conference call on 8 December, adding that if results continue improving, the company would consider increasing the dividend.
The Ford family will be one of the main beneficiaries of the dividend resuming, because of its economic stake in the business.
However, Booth said this didn't influence the decision to resume the payment. “This was a management decision and … it wasn't linked to any particular part of our shareholders,” he said.
Ford, which is the world’s fifth-biggest automaker by annual vehicle sales, was the only American carmaker not to receive state aid to prevent bankruptcy during the financial crisis. The company reported losses of about $15 billion in 2008, but recovered the following year with profits of $454 million.
Fourth-generation Bill Ford works with four other family members in the business, which was founded in 1903 by Henry Ford. In 2010, the group had revenues of $128.9 billion, up from $116.2 billion in 2009.