Ford Motor Co. on Thursday cut its dividend in half to 5 cents a share, a move expected to save the struggling automaker about $92 million per quarter. Its shares dropped more than 4 percent.
The board of directors of the nation’s second biggest automaker also voted to halve its members’ own fees.
“Our directors are well aware of the difficulties and sacrifices involved in turning around our company,” Chairman and Chief Executive Bill Ford said in a statement. “They have underscored this by voting to reduce their own compensation.”
Dearborn-based Ford is six months into a turnaround plan that calls for cutting 30,000 jobs and closing 14 facilities by 2012.
Bill Ford said Thursday that the obstacles that the company faced when it announced the restructuring have only intensified.
“The headwinds we faced at the beginning of 2006 have only become stronger, as consistently higher gasoline prices in the U.S. have caused consumer purchase preferences to shift away from SUVs and large trucks to smaller cars and crossover vehicles,” he said.
“While this shift plays positively to our new vehicle offerings, we must still get our costs in line in response to segment adjustments and higher commodity prices that are affecting the company.”
Ford said the company was speeding efforts to integrate product development in North America and internationally. He pledged to continue to look for places to cut costs.
The third-quarter dividend, down from the second quarter’s dividend of 10 cents, will be paid on Sept. 1 to shareholders of record as of Aug. 2.
Given the current number of shares outstanding, the dividend cut amounts to a quarterly savings of about $92 million, Ford spokeswoman Becky Sanch said.