Cash-Pressed Ford Maintains Its Dividend

Ford Motor Co., the cash-pressed No. 2 U.S. auto maker, said today its board voted to keep its quarterly dividend at 75 cents, surprising Wall Street, which had speculated for months that it would reduce the payout to conserve cash.

Ford has been hurt by the weak auto market and high investment expenses, and some industry analysts had said it would reduce the annual $3-per-share payment by half. Such a cut would have resulted in annual savings of $700 million, they said.

The last time Ford cut its dividend was in the first quarter of 1982--when the nation was in a deep recession. At that time, it omitted a payout.

Ford is expected to lose up to $250 million in the fourth quarter, due in large part to the slowdown in domestic car and truck sales. Also contributing to the company’s woes are real estate-related loan losses at its First Nationwide savings and loan subsidiary.

Analysts project 1990 full-year earnings for Ford of about $1.15 billion, or $2.50 a share, down sharply from $4.3 billion, or $9.13 a share, in 1989.

“This is just delaying the inevitable,” Wertheim Schroder & Co. auto analyst John Casesa said of Ford’s move.

“Unless the auto market in North America and Western Europe improves dramatically, the pressure to reduce the payout will be even greater by the end of the first quarter, and I doubt investors will be very enthusiastic about this declaration,” he said.

“To cut the dividend in this quarter would not have been necessary but probably prudent.”

The dividend is payable March 1 to stockholders on record as of Jan. 30.