Ford Motor Co.
(
F
) intends to hire 2,200 salaried workers in the U.S. this year in
order to support its new product launches at a fast pace. This,
along with the recent dividend hike and expected recovery in the
auto industry sales, sent the stock to 52-week high of $14.07 on
Jan 11.
The company's plan to hire more workers is a part of its 2011
contract with the United Auto Workers union, under which the
company committed to create 12,000 jobs in the U.S. by 2015. Good
news is that the company is more than halfway in its commitment,
including the latest decision to hire.
Last year, the automaker hired 8,100 combined hourly and salaried
workers in the U.S. as the company boosted manufacturing capacity
in order to meet burgeoning demand for its fuel-efficient and
advanced vehicles. Among these jobs, roughly 1,000 were hourly
jobs brought back to the company's plants in the U.S. from other
locations, including Japan and Mexico.
Recently, Ford surprised investors by doubling its quarterly
dividend payment to 10 cents from 5 cents for the first quarter
of the year. The increased dividend will be paid on Mar 1 to
shareholders of record as on Jan 30. The automaker last paid a
dividend of 10 cents per share in June 2006, which was reduced to
5 cents in September 2006.
Ford is the only Detroit automaker that survived the global
economic crisis without seeking bankruptcy protection unlike
General Motors Company
(
GM
) and Chrysler. Last year, the company regained its
investment-grade ratings from two agencies, including Moody's and
Fitch Ratings, and got its iconic blue oval back following the
release of all the assets pledged while securing the $23.5
billion loan in 2006 for its turnaround plan.
Auto sales in the U.S. grew 13.4% to the five-year high of 14.5
million vehicles in 2012 including a 9% rise to 1.4 million in
December last year. A host of macroeconomic factors helped the
industry reach the height. They include improving consumer
confidence, falling unemployment and improvement in home sales
and prices.
Sales were also fueled by strong pent-up demand, due to both
aging vehicles (average age of a car reached 11 years in the
U.S.) and the need to replace damaged vehicles from Hurricane
Sandy. Banks were also friendlier as they offered greater access
to loans with lower interest rates.
Ford's sales edged up 4.7% to 2.3 million vehicles in 2012,
including a 1.9% gain in December to 214,222 vehicles, as sales
of some of its highest selling vehicles, Ford Escape SUV (2.6%
gain) and Fusion sedan (2.7% decline), were hurt by vehicle
safety recalls. However, the company's market share reduced to
15.5% in 2012 from 16.8% in 2011.
The automaker expects to meet challenges in the U.S. and Europe
by executing its "One Ford" plan. The company aims to revive
sales by rolling out new models with best in quality, fuel
efficiency, safety and design. It plans to launch as many as 6
new Lincoln models in the next 3 years, including a small car in
2014. It also plans to roll out as many as 20 new models in
Europe over the next three years.
The stock currently retains a Zacks Rank #3 (Hold), which
supports long-term recommendation of Neutral on the stock.
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