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Moody’s Lowers Ford’s Credit Rating to One Step Above Junk
Moody’s Investors Service has dropped its credit rating for Ford Motor Co. by one notch to Baa2, its lowest investment-grade.
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Moody’s Investors Service has dropped its credit rating for Ford Motor Co. by one notch to Baa2, its lowest investment-grade.
Earlier this year the rating service lowered its outlook for Ford from “stable” to “negative.” Ford climbed out of junk status six years ago following the Great Recession.
Moody’s says it will take Ford several years to gain traction from its global $11 billion “Fitness Redesign” program, making the chances of a rating upgrade before 2021 “very modest.”
The service cites the complexities Ford faces in overhauling its product lineup and business operations as it rushes to electrify its vehicles, develop ride-sharing businesses and develop connected and autonomous-driving capabilities.
Ford notes that it has delivered solid results for years and points to a strong balance sheet that gives it considerable flexibility in implementing its overhaul. The company aims to slash costs in North America alone by nearly $26 billion.
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