Ford Downgraded by Fitch
Credit ratings agency Fitch Ratings announced it has further downgraded ratings for Ford Motor Co. and Ford Motor Credit Co., the automaker’s credit arm, to junk status.
The move reduces Fitch’s issuer default rating on Ford and Ford Motor Credit Co. to "B-" from "B." The downgrade reflects weaker auto sales, high gas prices, portfolio deterioration at Ford Credit and the effects of rising commodity costs.
Another downgrade may be likely soon, says Fitch, saying the companies’ outlook remains negative.
Ford reported its July U.S. sales slid 15 percent from last year, with consumers fleeing the gas-guzzling sport utility vehicle and pickup truck market.
Ford Motor Credit took a $2.1 billion charge during the second quarter because of the drop used vehicle values. The company says it will raise leasing prices on some models.
Another automaker, Chrysler LLC, says its own finance arm would get out of the leasing business altogether.
Published on August 13, 2008
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