Is Ford Close to Resuming Profitability?

One the day after it was reported that the Ford Motor Co (F) and Tata Motors Ltd (TTM) seem close to striking a deal in which the former company would sell its Jaguar and Land Rover properties to Tata, it was reported that the Ford’s Chairman Bill Ford Jr will resume receiving compensation from the company.

The Wall Street Journal reported a late-breaking article on Wednesday afternoon that Ford made an SEC filing that notifies the agency on compensation details for the company’s Board of Directors.

Mr. Ford has declined to accept any compensation from the company over the last three years because of its poor earnings performance.

Therefore, the report is significant because it could portend that Ford will soon return to profitability.

Considered in the context of Tuesday’s news about a potential sell off of its luxury brands to Tata Motors, the company could be signaling investors that it’s close to completing its turnaround program.

Any deal with Tata would most likely have been the result of long-term talks between the two companies.

NewsVisual created an IntellectSpace Knowledge Map that shows three main axes of connections between the members of the Boards of Directors of the Ford and Tata that could have been the impetus behind the negotiations.

The strongest axis of board room connections between them, however, runs through England’s Royal Academy of Engineering:

This institution connects the Ford Director Alan Mulally to Tata Directors Jamshed Irani and R A Mashelkar, since all three are members or fellows of the Royal Academy of Engineering. Consequently, it would be highly improbably for these three Directors not to be well acquainted with each other, especially given their service on the boards of auto companies.

Moreover, this seems like the most likely connection from which any negotiations could have started.

The Knowledge Map shows that a second axis of likely personal connections lies through Harvard University:

Tata Motors Chairman Ratan N Tata holds an MBA degree from Harvard University in 1975. Consequently, Tata could possibly know Ford Director Edsel B Ford II, who completed the Harvard Management program in 1981. Or Tata could potentially know also Ford Director Ellen R Marram, who also earned an MBA degree from Harvard University in 1970.

The third axis of personal connections that the Map illustrates is through the NYSE Euronext Inc:

Specifically, Chairman Tata could also be acquainted with Ford Director Joma Ollila, who also happens to be the Chairman of Nokia Corp, Finland, via the International Advisory Committee to the NYSE Euronext Inc on which they both serve as members.

Although the Knowledge Map cannot offer proof positive that these connections spawned the talks for a deal, it does at least seem probably that the personal connections it points to could have served some role.

(Note: the information contained and presented in Knowledge Maps is public information from the Securities and Exchange Commission of the United States of America).

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Comments

[ED K]

FORD PROFITABLE,AND THE POPE IS A WOMAN.

[larrykat]

There is no reason Ford cannot come back - the have been taking some almost draconian measures to do so. It is starting to have an effect, obviously. I can't wait!

[coeus89]

i am a ford investor and i believe they are a great company. they were however misguided for many years bu the ford family. i believe that ford will be profitable within a year. they are competitive in all segments except for hybrid cars (which i hope will change soon). and there is no reason they shouldnt be profitable after the UAW concessions. i cant wait for the return on this investment