Wall Street punishes Ford's success

| Friday, January 28, 2011
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Ford Motor Co. this morning announced a 2010 profit of $6.6 billion, its highest annual income in 11 years. But as of this writing, Ford's stock price is down 11 percent.

Why? Veteran auto writer Joann Muller of Forbes does a good job of explaining the reasons, which include an unexpected loss on European operations in the fourth quarter and higher structural costs.

But much of the $1 million in increased costs was due to spending on new products. Those vehicles, which include the Ford Explorer, will lead to a "stunning year" for Ford in 2011, chief financial officer Lewis Booth said.

There was good news for Ford hourly workers in the company's financial performance last year, as well. The automaker's 40,600, unionized U.S. hourly workers will get profit-sharing checks averaging $5,000 apiece.

That may annoy those who hate unions and want to turn Michigan into a right-to-work state. But the money will gladly be accepted by car and boat dealers, restaurants, retail stores and home builders in Michigan struggling to recover from the Great Recession.

And the approximately $200 million in profit sharing paid workers might be just a fraction of what Ford CEO Alan Mulally could someday take home.

Detroit Free Press business columnist Tom Walsh wrote today that Mulally's eventual payout could hit $500 million, depending on how high Ford's stock price, now trading at about $16.50 a share, climbs in the next year ago.




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