DETROIT, Oct. 11 (UPI) -- Ford Motor Co. shareholders got some bad news.
The board of directors cut the automaker's regular quarterly dividend by 50 percent Wednesday to save more than $1.1 billion a year and on Thursday five top executives announced their retirements.
James Donaldson, group vice president for Global Business Development; Vaughn Koshkarian, vice president Ford Asia Pacific; Michael D. Jordan, vice president Ford Customer Service; James Yost, vice president corporate strategy; and Elliott Hall, vice president Dealer Development, will retire effective January 2002.
Lincoln Mercury President Mark Hutchins also will retire next year.
Ford President and CEO Jacques Nasser said Kathleen Ligocki, vice president Canada, Mexico and North America, would become vice president of strategy, business development and Canada and Mexico. Mark Shultz, general manager of Ford Europe, will become vice president Ford Asia Pacific and Vice President Global Consumer Services Brian Kelley will be appointed president of Lincoln Mercury.
Two remaining open positions will not be filled.
Ford said it was reducing its dividend from 30 cents to 15 cents a share, the first cut in the quarterly dividend since the Gulf War a decade ago. It will be paid on Dec. 3 to shareholders of record Nov. 2.
During the highly profitable 1990s, Ford paid out more than $2 billion annually in dividends on about 1.8 billion outstanding shares. The Detroit Free Press said the family of Chairman William Ford alone owns more than 18 million special Class B shares and millions more of publicly traded Class A shares.
"The dividend reduction is a difficult but necessary action," said Nasser. "A number of factors have converged in the last six months to dramatically impact our company and our operating results."
Nasser said the Sept. 11 terror attacks at the World Trade Center in New York and the Pentagon outside Washington had weakened already slowing vehicle sales.
"Recognizing there are challenging days ahead, we are taking aggressive actions to address the issues that face our company."
Ford began a serious cost-cutting program following the Firestone tire recall and this summer spent $3 billion before taxes to replace 13 million Wilderness AT tires it said were unsafe. The company's credit rating was downgraded a few weeks ago.
Ford reduced its North American white-collar work force by 5,000 jobs, eliminated bonuses for top executives, cut travel, suspended a computer giveaway program for employees, and is expected to announce a major restructuring that may include some plant closings affecting UAW-covered jobs.
"Ahead of us lie many difficult challenges," said Chairman William Clay Ford Jr.
Ford lost $551 million in the second quarter of 2001 and said it will post a loss in the third quarter.
Dieter Zetsche, the head of the rival Chrysler Group, said Wednesday that slow car and truck sales may force Chrysler to revise its $3.9 billion turnaround plan, which calls for the No. 3 automaker to return to profitability next year.
Chrysler had chopped 26,000 jobs since February and late last month reluctantly matched the zero-percent financing deals offered by Ford and General Motors to resuscitate sales after the terror attacks.