Ford bond rating cut further

Fitch has decided to cut Ford’s bond rating down tojunk level, chopping it from BBB- to BB. The reason for the cut is said to be primarily the performance of the company’s SUV line, and especially the faultering Explorer. That model’s Nov. 2005 sales were at only 50% of year-ago levels, despite an extensive redesign. Fitch states that Ford will“remain challenged to sustain revenues given price pressures and the trend toward lower-priced vehicles.”

By John Neff
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Fitch has decided to cut Ford’s bond rating down
to junk level, chopping it from BBB- to BB. The reason
for the cut is said to be primarily the performance of the company’s SUV line, and especially the faultering
Explorer. That model’s Nov. 2005 sales were at only 50% of year-ago levels, despite an extensive redesign. Fitch
states that Ford will “remain challenged to sustain revenues given price pressures and the trend toward
lower-priced vehicles.”
On the bright side of things, the rating agency thinks that Ford has
sufficient money to go through the restructuring that’s likely to be announced next month.