Can Ford's Current Cushion of Cash Absorb Blow of Latest Restructuring?
As Ford Motor Co. attempts another turnaround, one item drawing particular scrutiny is the auto maker's tightening cash situation, which has already forced the company to eliminate its dividend and could prompt asset sales or other moves in the near future.
Ford Motor is starting its latest restructuring with a sizable cash cushion -- roughly $23 billion. But that is down from $25 billion at the start of 2006 and will likely keep declining for the rest of this year and next.
Analysts and ratings firms say the cost of shrinking Ford is growing as the auto maker ponies up severance packages, early-retirement offers and buyout plans in an attempt to eliminate about 44,000 workers by the end of 2008. Ford's goal is to cut jobs, close several plants and make the auto maker profitable in North America by 2009.
Ford Chief Financial Officer Don Leclair says the company's gross auto cash position will drop by year's end to about $20 billion -- a figure supplemented by $3.4 billion taken out of a fund employers set up to pay retiree health-care costs. For all of 2006, Ford will burn through an astonishing $8.4 billion.
Ford shares, which traded at about $10 a year ago, dipped as low as $6.19 in late July but have hovered between $8 and $9 for the past month. They slipped more than $1 on Sept. 15 when Ford announced its latest restructuring plan. In 4 p.m. composite trading yesterday on the New York Stock Exchange, Ford's stock was up 33 cents to $8.56, giving the company a market value of $15.9 billion.
Of the 15 analysts covering Ford, only one has a "buy" rating, according to Thomson Financial. The other 14 rate Ford's stock a "hold," "sell" or "strong sell." Consensus for Ford's 2007 earnings is a loss of 23 cents a share, compared with earnings of $4.36 a share at General Motors and $8.45 a share at Toyota.
The restructuring costs, combined with massive vehicle-production cuts and expected and ever-increasing quarterly losses, will keep eating away at Ford's cash, making asset sales of brands like Jaguar or Land Rover, or even Ford Motor Credit, more inevitable, say analysts.
"In going through a turnaround like this, it is clear Ford will consume a lot of cash in 2006 and 2007 through the restructuring and operating costs. They will use a lot of cash before the plan kicks in," said Bruce Clark, senior vice president at Moody's Investors Service, which last week lowered Ford's credit rating to B3, or six notches below investment grade.
"Well, if it doesn't begin to take, they will still be burning cash, and if they need another one of these, they won't have the financial cushion any longer. They simply have to get it right this time," Mr. Clark said.
He says Ford has "a sizable cushion" of cash, but notes it can erode fast. Mr. Clark said the probability of default of B3 companies is about 26%.
Ford has yet to say how much cash it will burn in 2007 and 2008, but it is expected to give some guidance at its third-quarter conference call late this month. Analysts like Eric J. Selle at J.P. Morgan estimate Ford will burn through about $6 billion in cash in 2007, barring the sale of an asset like Jaguar or Land Rover. J.P. Morgan has Ford shares rated "underweight." The financial-services firm owns Ford shares and has done investment-banking work and other business with Ford during the past year.
Mr. Selle and other analysts estimate a similar cash burn into 2008, potentially pushing Ford's cushion below the $10 billion level -- an amount some analysts say is close to the minimum level of cash required for Ford to operate the business.
"We think they need in excess of $10 billion in actual cash to keep running." said Kip Penniman, credit analyst for KDP Investment Advisors in Vermont. "If it gets below that level, it gets quite concerning."
Ford's Mr. Leclair acknowledged the auto maker has substantial intramonth cash swings as it pays parts suppliers and hourly payroll every week for 75,000 workers, but said "our peak-to-trough swing is not $10 billion. That is off by a lot." He wouldn't specify a minimum level of cash needed at Ford.
If cash does become a concern, Ford has several, less-discussed options before it, according to people familiar with the matter. One step is to begin issuing debt secured against its existing assets.
The new debt could, for instance, be secured against a variety of different items. Those include individual ownership stakes, such as its Mazda interest; assets at a high holding-company level; or plants and equipment in the U.S. and around the world.
Ford in the late 1990s studied selling its stamping operations, and two people familiar with Ford's plans said it could explore that option again if it could get the United Auto Workers to buy in.
Still another option, says a person familiar with the matter, would be to sell off interests in the international subsidiaries of Ford Motor Credit. The credit company maintains operations throughout Latin America, Europe and the Asian-Pacific region.
J.P. Morgan estimates a 51% stake in Ford Motor Credit would be valued at $6.95 billion. If the international units are worth one-quarter of that total, that gives a rough value of $1.7 billion. But Ford could elect to sell 100% stakes, potentially bringing in more cash.
Asked if Ford Credit is looking at selling or restructuring its overseas assets, Mr. Leclair said, "stay tuned."
J.P. Morgan's Mr. Selle, who says in a report that Ford is being "rosy" to expect $20 billion in cash at the end of the year, estimates the auto maker could get about $3.1 billion for the sale of its Aston Martin, Jaguar and Land Rover brands, with Land Rover fetching the most at $1.9 billion. He expects those brands to be sold in the next 12 months
Ford has indicated it will sell Aston Martin but says it has no plans to sell Jaguar and Land Rover.
One of Ford's biggest costs during the next year will be getting rid of people. Mr. Leclair said Ford's cash is also being eaten up by operating losses, contributions to Ford's pension plan and the 21% cut in the auto maker's 2006 North American vehicle production.
Mr. Selle estimates Ford will spend about $2.4 billion this year and next buying out hourly and salaried workers.
Ford spokeswoman Becky Sanch says the auto maker isn't giving guidance on the overall costs of these buyouts. At the start of 2006, Ford estimated full-year charges of $3.8 billion for the closing of assembly plants in St. Louis and Atlanta plus employee buyouts, but said on Sept. 15 that figure will be "significantly increased" because of the increased hourly and salaried job cuts.
Ford expects to contribute $1.4 billion in cash and cash equivalents to its pension plan in 2006. Ford's U.S. pension plan, which covers 345,000 people, was underfunded by $2 billion at the start of the year.
To conserve cash, Ford also eliminated its dividend of five cents a share starting in the fourth quarter, a move that will save the auto maker about $374 million a year.
Cornell University business professor Roni Michaely, who wrote a paper analyzing 887 publicly traded companies that eliminated their dividend over 25 years, said Ford is making a risky move. His analysis shows that shares in companies that eliminate their quarterly payout fall 11% in the 12 months after the move and 15% in the three years after, in part because certain funds and money managers won't hold stocks that don't pay a dividend.
福特能消化重组成本吗？
随着福特汽车(FORD MOTOR CO.)展开新一轮的重组行动，有一个问题引起了外界特别的关注：这家汽车生产商在现金方面捉襟见肘。这种窘境已迫使它取消发放股息，并且有可能导致其在不久的将来出售资产或者采取其他措施。
福特汽车正手持巨额现金开始新一轮的重组，公司目前持有230亿美元，但这一数额较2006年初的250亿美元有所下降，并且在今年剩下的时间及明年公司持有的现金量可能还会不断降低。
分析人士及评级公司表示，福特将通过终止合同、提前退休以及一次性补偿自愿离职等方式在2008年前裁掉44,000名工人，因此，虽然公司规模在缩减，但其所承担的成本却在不断增加。福特的目标是削减工作岗位、关闭数家工厂，并且使北美业务在2009年前实现盈利。
福特的首席财务长道恩?雷克莱尔(Don Leclair)说，在年底前公司持有现金将降至200亿美元，这一数字中包括了一笔34亿美元的资金，来自一个由雇主设立、用于支付退休人员医疗保健费用的基金。福特2006年全年的现金消耗量将高达84亿美元。
一年前福特股价在10美元左右，今年7月底一度跌至6.19美元，不过上个月一直8-9美元之间徘徊。当福特9月15日宣布重组计划之后，其股价的下跌幅度超过了1美元。纽约证交所周三收盘，福特股价上涨了33美分，至8.56美元，其市值达到159亿美元。
据Thomson Financial称，跟踪福特股票的15位分析人士中只有一位对福特的评级为“买入”。其他14位对福特的评级为“持有”、“卖出”或者“强烈建议卖出”。市场普遍预期福特2007年的收益为每股亏损23美分，对通用汽车(General Motors)的预期是每股盈利4.36美元，丰田汽车(Toyota)为每股盈利8.45美元。
分析人士表示，重组所产生的成本，再加上大规模削减产量以及预料之中不断增加的季度亏损都将侵蚀福特的现金。这种状况也使福特出售旗下品牌捷豹(Jaguar)和陆虎(Land Rover)、甚至是Ford Motor Credit资产变得更有可能。
穆迪投资者服务公司(Moody's Investors Service)的首席副总裁布鲁斯?克拉克(Bruce Clark)说：“要完成这样的重组计划，福特很明显将在重组及运营成本方面消耗大量现金。他们在计划产生效果之前将投入大量的资金。”穆迪投资者服务公司上周将福特的信用评级调至B3，比投资级别低六个等级。
克拉克说：“如果业务没有好转，他们将继续消耗现金。如果他们想再进行一次重组的话，恐怕就没有现金可供使用了。他们这一次必须成功。”
他说，福特现在手头还有大量现金，但很快会耗尽。克拉克表示，B3评级的公司拖欠债务的几率约为26%。
福特还没有对2007年及2008年将会消耗的现金数量作出表态，但外界预计公司将在本月末举行的三季度电话会议上作出预期。J.P摩根(J.P. Morgan)的分析师艾利克?塞莱(Eric J. Selle)及其他分析人士预计，如果不出售捷豹或陆虎等品牌的话，福特将在2007年消耗60亿美元的现金。J.P.摩根对福特股票的评级是“减持”。这家金融服务公司持有福特的股票，并在过去一年中与福特有投资银行等业务关系。
塞莱和其他分析人士预测福特在2008年消耗的现金数量与2007年类似，这会使福特持有的现金量降至100亿美元以下。一些分析人士认为，100亿美元已接近福特维持运营所需的最低水平。
“我们认为，福特维持运行所需的实际现金数量要超过100亿美元。”KDP Investment Advisors的信用分析师基普?彭尼曼(Kip Penniman)说。“如果现金数量低于这一水平，它的状况将十分令人担忧”
福特的雷克莱尔承认，公司需向部件供应商支付货款，并且每周需向75,000名小时工人支付工资，因此月内的资金起伏非常大，但是他说“我们所需的资金最低水平并不是100亿美元。这个数字出入太大了。”他没有详细说明公司所需最低现金水平。
据知情人士透露，如果现金确实成了一个令人担忧的问题，福特还有几个较少被谈及的应对办法。其中之一就是开始发售以现有资产为抵押的债券。
新债券可以以多种不同的资产作为抵押。比如，马自达股份等私人持有的股份，控股比例较高的控股公司的资产，或者美国乃至全球的工厂以及设备等。
福特在20世纪90年代末曾考虑出售其冲压业务。了解该计划的两位人士称，如果福特能够使全美汽车工人联合会(United Auto Workers)买入它，他们可能会重新考虑这个方案的。
知情人士说，还有一个选择就是出售Ford Motor Credit业务国际分支机构的股份。这家信贷公司目前在拉丁美洲、欧洲以及亚太地区都有经营。
J.P摩根估计，Ford Motor Credit 51%股份的定价约为69.5亿美元。如果其国际分公司是其总 的四分之一，那么其价值约为17亿美元。但福特可能会选择将出售所有股份，以带来更多的资金。
当被问及福特汽车信贷是否考虑出售或者重组其海外业务，雷克莱尔说稍后再讨论这个问题。
J.P摩根的塞莱在一份报告中称，福特预计年底的现金量为200亿美元是较为乐观的估计。他估计，福特通过出售其Aston Martin、捷豹以及陆虎等品牌能够获得31亿美元，其中陆虎带来的资金最多为19亿美元。他预计这些品牌将在未来的12个月内被出售。
福特曾暗示将出售Aston Martin。但它表示没有出售捷豹及陆虎的计划。
福特明年最大的成本之一就是裁员。雷克莱尔说，资金运营亏损、退休金计划以及2006年北美汽车减产等诸多因素将侵蚀公司的资金量。
塞莱估计福特今年及明年将花费约24亿美元来买断小时工及领薪工人，其中13亿美元用来削减27,000个小时工职位、11亿美元用在削减领薪工人职位上。
福特发言人贝姬?桑奇(Becky Sanch)说，公司没有对这些一次性补偿自愿离职方案的成本作出预期。福特2006年伊始曾估计关闭圣路易斯及亚特兰大的组装工厂以及一次性补偿自愿离职方案的全年费用为38亿美元。但是该公司在9月15日表示，由于削减的工作岗位将增加，因此这个数字也将“大幅上升”。
福特预计2006年向退休金计划缴存的现金以及现金等价物的总金额为14亿美元。福特的美国退休金计划共涵盖了345,000人，今年初曾出现20亿美元的资金缺口。
为了保留现金，从第四季度起福特将不再发放每股5美分的股息。此举每年可为福特节省3.74亿美元。
康乃尔大学(Cornell University)的商业教授罗尼?米凯尔利(Roni Michaely)曾撰写论文，分析研究在过去25年没有发放股息的887家上市公司。他表示福特这是个冒险的举措。他的分析显示，公司在停止发放季度股息后，其股价在随后的12个月中将下跌11%，在随后三年中将下跌15%。出现这种状况的原因之一是：某些基金以及基金经理不会持有不发放股息的股票。
Jeffrey McCracken / Dennis K. Berman
