Slowing Traffic Ahead

Ford Motor Co.'s diversification into financial services is part of a strategy to invest some of its late 1980s automobile profits into a business that will yield consistent profits, even when auto sales are poor. The goal was for financial services to eventually produce 30% of the corporation's profits. With its $3.4-billion purchase in November 1989 of the Associates, Ford became the nation's 2nd-largest provider of diversified financial services. Ford now sits on $115 billion worth of banking-related assets. While about half of this is Ford Credit Co.'s automotive paper, the balance is still large. Only Citicorp, with $230 billion in assets, is bigger overall. Headed by Kenneth Whipple, executive vice-president, Ford's financial services group includes: 1. First Nationwide Financial Corp., the country's 3rd-largest thrift, 2. Ford Motor Credit Co., the auto loan arm, 3. US Leasing International Inc., and 4. the Associates, a general consumer credit company. Ford has spent some $5.5 billion over the last 5 years to acquire assets for its financial services group, which had a total return on equity of 10% in 1989.