AUTOS : Ford Takes Dim View, Cuts Its Dividend 47%

Concerned that the auto industry’s steep downturn in sales and earnings shows no sign of an imminent reversal, Ford Motor Co. on Thursday slashed its dividend 47% to 40 cents a share.

The move was widely anticipated by auto industry analysts, many of whom criticized the company for resisting pressure to cut the quarterly dividend when its board met in January. The action will save the company about $650 million a year.

Ford is the last of the Big Three U.S. auto makers to cut the quarterly payout. In February, General Motors Corp. cut its dividend to 40 cents a share from 75 cents, while Chrysler Corp. halved its dividend to 15 cents a share in March.

Thursday’s action reflects the No. 2 auto maker’s pessimistic assessment of prospects for a quick economic upturn.

“Ford’s policy is to sustain the dividend during normal cyclical downturns,” Chairman Harold Poling said. “But the situation we face today is much more than a normal trough in the business cycle.