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Ford Motor considers going private

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Ford Motor considers going private

Updated 8/24/2006 3:01 PM ET E-mail | Save | Print | Reprints & Permissions | Subscribe to stories like this


Ford shares traded as high as $10.20 in the past 12 months and closed at $7.76 Wednesday.


CEO William Clay Ford Jr.

Headquarters Dearborn, Mich.

Wed. closing

stock price $7.76

2005 revenue $177.1 billion

2005 net income $2.0 million

Employees 300,000

Plants 108

Vehicle unit sales 6.8 million

U.S. market share 18.2%

Automotive brands Ford, Lincoln, Mercury, Mazda, Aston Martin, Jaguar, Volvo, Land Rover

By Sharon Silke Carty, USA TODAY

DETROIT — Ford Motor (F) is considering taking the company private, a move that could give the ailing automaker time to restructure operations outside the glare of critics, a source with direct knowledge of the discussions said Wednesday. "The family is willing to look at anything," said the source, who didn't want to be identified because the discussions are ongoing. "A lot of different scenarios are being gamed out."

With Ford's shares trading around an anemic $7.76, going private could cost interested parties as little as $13.34 billion.

CUTTING INVENTORY : Ford offers 0% financing or cash

The Ford family owns about 5% of Ford's outstanding shares. The family controls 40% of the company through a separate class of stock. The automaker had no comment.

Plummeting pickup sales have derailed Ford's current restructuring plan, laid out last January :headscratch: , and the automaker plans to unveil an accelerated version in September. Through the first half of the year, Ford has lost $1.4 billion. WHY WAIT?

Top executives have said they are looking at every option available to turn Ford around, including selling off troubled brands such as Jaguar, entering into partnerships with other automakers, slashing its workforce and closing more plants. The company recently hired former Goldman Sachs banker Kenneth Leet to help it explore its options.

"The biggest benefit to taking it private is just not having to answer to all the external stakeholders they have to answer to today," said Kevin Reale, an analyst with AMR Research. :bawlin:

Nearly 600 banks or investment firms own shares in Ford, according to Thomson Financial, and 790 mutual funds also have a stake in the automaker. Sixteen analysts cover Ford, issuing reports to investors when news breaks.

CEO Bill Ford has been criticized for several incidents since taking the job in October 2001. In 2002, he said the automaker would make $7 billion in pretax income in 2006. In April 2005, three weeks after saying it would still meet its goals, it revoked its earnings guidance and said it would no longer meet the $7 billion target, shaking investor confidence. Bill Ford is a moron....

Ford's shares have traded between $6.06 and $10.20 in the past 52 weeks, giving it a market capitalization of $14.5 billion, a quarter of smaller rival DaimlerChrysler's market cap.

"The assets are tremendously undervalued," said David Cole of the Center for Automotive Research. A private equity firm could be eyeing a future share price of $20 to $40, he said.

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