Both Standard and Poor's and Moody's downgraded Ford Motor Co.'s credit rating further into junk territory on Tuesday, pointing to the automaker's worsening North American operations and a consumer shift away from trucks and SUVs toward fuel-efficient vehicles.
S&P lowered Ford's rating one notch to B with a negative outlook, while Moody's moved it down to B3 from B2. Neither agency expects Ford to seek bankruptcy protection in the near term, but both warned that the company's financial cushion is shrinking.
Ford had already announced plans to eliminate a third of its North American workforce and close additional plants after posting a 1.4 billion dollar loss in the first half of 2006. The company also pushed back its profitability target by one year to 2009 and forecast its US market share would slip to 14 or 15 percent, down from roughly 17 percent.
Moody's senior vice president Bruce Clark warned that Ford must execute its restructuring plan without major missteps, adding that by 2009 the company could exhaust much of its available liquidity if it falls off course. S&P noted that Ford's core problems, including market share losses, unfavorable product mix, high inventories, and rising raw material costs, have continued to worsen or accelerate through 2006.
Historical summary. TurkishPress restated this wire report, first published in September 2006, in its own words.