Ford's rating outlook downgraded by Moody's; investors concerned [View all]
Ford Motor Company has had its rating outlook change from stable to negative, which does not impact the company’s credit rating but does alert Wall Street investors that the situation is dynamic.
The latest Moody's rating outlook indicates there is downward pressure on Ford's credit rating and a higher chance of a credit rating downgrade in the next 12 to 24 months.
“The negative outlook reflects the challenges Ford will face in implementing its ‘Fitness Redesign’ initiatives” and restoring operating performance that is more solidly supportive of its sound credit rating, wrote Bruce Clark, senior vice president at Moody’s Investors Service in New York. “During the past 18 months the company has allowed an erosion in many of the operating disciplines that it established following the 2009 restructuring of the North American auto sector. These disciplines supported strong performance through 2016. In addition, Ford is contending with the disruptive changes being caused by the auto sector’s move forward vehicle electrification, autonomous driving, and ride sharing.”
He said Ford’s “ability to stabilize its outlook” will be determined by the pace at which it can address its challenges.
Read more: https://www.freep.com/story/money/cars/2018/01/31/ford-moodys-rating-outlook/1082631001/
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