Ford (F) Taps Brakes On Dividend Payout, Withdraws '20 View
Zacks Investment Research | Mar 19, 2020 09:51PM ET
Ford Motor Company (NYSE:F) recently announced that the company will suspend its 15 cents per share quarterly dividend and withdraw the 2020 guidance to preserve cash as vehicle sales fade on the coronavirus outbreak. The company had $22.3 billion in cash and $35.4 billion in liquidity at the end of 2019, which would be used to deal with the downturn caused by shutdowns in production due to the pandemic-led crisis.
The company is also planning to draw $15.4 billion from two credit lines. It will borrow $13.4 billion under its corporate credit facility and an additional $2 billion under the supplemental credit facility.
Meanwhile, Ford will provide a new vehicle financing program to boost demand during such uncertain times, which is denting consumer confidence and slowing dealer-showroom traffic.
The company, through its financing division, has announced a program giving customers who buy new vehicles the option to delay their first payment for six months. Ford will pay for three months and customers can defer for up to three more for a total of six months. The program is only for people purchasing 2019 and 2020 model-year vehicles, excluding 2020 Super Duty trucks.
Moreover, the United Auto Workers (UAW) union recently ordered Ford, General Motors (NYSE:GM) and Fiat Chrysler (NYSE:F) to shut down their U.S. factories for two weeks, in order to safeguard its members, families and communities. All three automakers have bowed to pressure from the UAW as coronavirus cases keep escalating in the nation.
Ford currently carries a Zacks Rank #5 (Strong Sell).
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