As a shareholder in U.S. public companies, mostly through Vanguard index funds, I usually find myself asking “Why am I paying a manager $50 million per year to earn an average (or below average) return on investment? Couldn’t they have found someone mediocre for $1 million/year and given us the $49 million remainder as a dividend?”
The news about Ford making a fat profit for 2010, however, prompts me to issue a public thank-you to all of their workers.
What makes Ford special? The U.S. government handed out nearly $100 billion in tax dollars to Ford’s competitors. How many enterprises could survive this? I don’t think our helicopter school could survive if the place across the hall were given $100 billion.
So.. from a shareholder: thanks, guys and gals!
[To forestall comments that would take away from the spirit of the thank-you: yes, I am aware that Ford had some help from the spectacular incompetence of the management at Chrysler (e.g., http://en.wikipedia.org/wiki/Robert_Nardelli , paid $500 million by Home Depot shareholders while the company stagnated, then he moved over to dig a deeper hole for Chrysler) and GM (see this September 2009 post about the pensions that GM managers agreed to provide). However, I don’t think that should stop shareholders from thanking the Ford team.]
Also thank the Ford family for owning 3% of the company. If the company went bankrupt, it would have been their $$$ down the drain. Instead, they grew their wealth from a low of approx $170 million up to $1.7 Bil.
In principle I am in agreement. I would like to thank Ford even more for making cars again that folks actually want rather than cars for those who bought cars only because they were american (not really) or those who could not afford / could not be financed by Honda/Toyota.
I would like to point out however that some of fords paper was swapped out for Treasury Paper by the Fed from Banks who held it as part of the asset swap program in 2008/2009.
Would you be sufficiently appreciative of Ford’s employees to consider buying one of their cars?
Bob: I’m also, through index funds, an investor in the other companies (including, horrifyingly, the GM that went bankrupt and left equity investors with nothing while the management and unions got to party with the taxpayers’ $100 billion (I guess the bondholders got a little something too)). Since I was losing faith in U.S. public companies (too much looting by management), I had an unusually high percentage of my investments in foreign stocks, so I’m also an investor in VW, Honda, Toyota, etc.
Would I buy a Ford? Sure, if they made a car or minivan with smart electronics, e.g., smart enough to keep a dog cool with an exhaust fan when the car was parked, smart enough to know if a baby had been left in a hot car and make a phone call or roll down the windows, and sufficiently ergonomically optimized to put the navigation screen in front of the driver and demote the speedometer, temperature, tachometer, and other gauges unless they were relevant in a given situation.
Until then… I’ll drive my 2007 car because there does not seem to have been any useful innovation by any car manufacturer other than the Tata Nano folks.
Well, cool is a rule, but sometimes bad is bad:
Ford Motor Company Is Making Record Profits – By Shipping Our Jobs Overseas
That’s not bad. If Ford can make more money by sending jobs overseas, those jobs are costing Americans too much. Comparative advantage, remember? It’s depressing that something discovered so many years ago has yet to sink in.