3 bits of news from Ford Motor Company today
The first bit... Profits.
Ford reported first quarter income this morning. The automaker says net income fell by 45 percent compared to a year earlier. Overall, net income totaled $1.4 billion, compared with $2.5 billion last year.
Ford says European sales plummeted and the company paid higher taxes.
The second bit... Pensions.
The company is planning to offer up lump-sum pension payments to 90,000 U.S. salaried retirees and U.S. salaried former employees.
In a statement, the company said this was part of their long term strategy to "de-risk its global funded pension plans."
If an individual elects to receive the lump-sum payment, the company’s pension obligation to the individual will be settled. This is the first time a program of this type and magnitude has been offered by a U.S. company for ongoing pension plans. Payouts will start later this year and will be funded from existing pension plan assets. This is in addition to the lump-sum pension payout option available to U.S. salaried future retirees as of July 1, 2012.
The New York Times reports the plan is to reduce liabilities to its underfunded pension plans:
Ford’s global pension plans had $74 billion in liabilities at the end of 2011 but were underfunded by $15.4 billion.
And the third bit... Consumer Demand.
Ford acknowledged they likely would not be able to keep up with pent-up consumer demand because of production constraints. Again, from the New York Times:
Ford this month increased its industry light-vehicle sales forecast for the United States in 2012 to a range of about 14.3 million to 14.8 million. But it said it expects its market share to decline because it will not be able to raise plant output quickly enough to match the market’s growth.
“We just simply can’t keep up with what we think will be the level of consumer demand,” Mr. Shanks said. “It’s not going to affect profitability because we’ll still build what we thought we would or a little bit more.”