The Secrets of Ford

Into a Pittsburgh stockbroker's office last week walked a man with $300,000 in his pocket. Said he, plunking the money on the broker's desk: "Put it in Ford.'' Buy-Ford fever was running high throughout the U.S., as Ford Motor Co. prepared for the Jan. 18 launching of its first public stock sale (TIME, Nov. 14). The Ford Foundation, owner of the stock to be sold, had asked brokers and dealers to allot each customer initially no more than 100 shares. But it looked as if most customers would be lucky to get ten shares apiece.

The scramble got even worse when Ford filed a preliminary registration statement with the Securities and Exchange Commission. The statement revealed that the Ford Foundation will float the biggest common-stock offering in U.S. history: * 10.2 million shares, instead of the 6,900,000 originally planned. Estimated maximum market value: $765 million. For the first time in its 52-year life, Ford also revealed the innermost secrets of the company.

Ford's sales in 1954 totaled $4,062,000,000, making it fourth biggest U.S. industrial corporation (behind General Motors, Standard Oil Co., N.J., and American Telephone & Telegraph). Ford's 1955 sales will be even bigger: the total for the first nine months of the year was $4,042,600,000. Dividends in 1955 were equivalent to $3.27 a share of the capital stock to be outstanding next month, and Ford plans to start the new stock off on a $2.40-a-share yearly basis.

Long Climb. In terms of assets, Ford ranks fifth in the U.S. with $2,483,000,000, under the three sales leaders and fourth-ranking ($3,348,000,000) U.S. Steel Corp. On both counts Ford is the second largest U.S. automaker.

Ford reached this summit after a decade of steady climbing. In 1946, on sales of roughly $900 million, it lost $8,000,000. It rode into the black the next year with a net income of $63 million, almost quadrupled the figure by last year with $228 million. Passenger-car and truck sales last year were 1,991,000, or 30% of the U.S. auto industry's total v. G.M.'s 50% and Chrysler's 13%. In the first nine months of this year, net income of $312 million was well above last year.

In the nine years and nine months ended Sept. 30, Ford spent $1,334,200,000 on plant and equipment, not counting the cost of retooling for new car models each year. It plans to spend $960 million more on expansion and modernization over the next two years.

Well-Paid Team. Ford's growth has been the work of a high-octane management team headed by Henry Ford II and Ernest R. Breech, who was made the company's first board chairman this year. The team has been handsomely paid for its job. The eleven top officers of the company collected $2,414,500 in direct compensation this year (including some held over from 1954); Breech and Ford each received $321,000.

In addition, Ford executives and key employees have been given options to buy big blocks of the company's stock at $21 a share v. the expected market price of around $70. As of Dec. 1, they had bought 647,100 shares of the new common to be issued next month, and options were still outstanding for 1,513,500 shares more. Thus the Ford executives, e.g., Breech, who has bought 27,000 shares this year and has 63,000 more under option, will all make millions--and pay only a capital gains tax on them.

* Though not the biggest security offering of any kind. The record: American Telephone & Telegraph's offering of $959 million in debentures two years ago.

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