Building shareholder value appears to be the new Job One at Ford Motor Co.
Ford Chief Executive Jac Nasser has a personal crusade to educate Ford employees on the importance of shareholder value. He wants to create a more entrepreneurial, cost-conscious and growth-oriented company.
Over the past three years, Ford shareholders have fared better than investors in other major automakers, according to the Pricewaterhouse-Coopers Share-holder Value Index. And, in general, investors in auto companies have seen higher returns than those who invest in auto suppliers or US auto retailers.
Over the past three years, Ford's total shareholder return was 178.7 percent, more than twice the industry average, the survey shows. A $1,000 investment in Ford stock three years ago would have returned about $2,790 at the start of this year.
PricewaterhouseCoopers' measure takes into account the movement of a company's share price as well as any stock splits and buybacks. The index assumes reinvestment of any cash dividend.
'As the automotive industry enters its second century, shareholder value will become the differentiator between winners and losers,' said Jeff Sands, a director of North American investment banking with PricewaterhouseCoopers Securities in Detroit.
In addition to automakers, the PricewaterhouseCoopers study looked at the 42 largest suppliers with capitalization of more than $200 million. Suppliers whose revenues were not at least 50 percent automotive were excluded.
The auto retailers examined were all US companies with more than $100 million in market capitalization.
Only Ford, Renault SA, General Motors and Toyota Motor Co. outperformed the average three-year index return of 64.4 percent. The three-year measure is considered the most reliable indicator of shareholder value creation.
Ford will be among six automotive industry companies recognized by Automotive News Europe's US sister publication Automotive News and consulting/accounting firm PricewaterhouseCoopers for their shareholder value achievement at the Automotive News World Congress in Detroit this Wednesday, January 19.
Using the Pricewaterhouse-Coopers value index, awards will be given to manufacturers and suppliers for one-year and three-year performances. Retailers will be honored for one-year and two-year results.
The auto industry lagged both the Dow Jones Industrial index with 86.9 percent and the Standard & Poor's 500 Composite with 107.5 percent.
Still, the automakers as a whole far surpassed auto suppliers and auto retailers in generating shareholder value, the Pricewaterhouse-Coopers results show.
Sands said companies such as Ford and Toyota, the top one-year performer, will prosper and help set the rules for the industry. He added: 'Those that lag will fall victim to globalization and consolidation.'