Jump to content
  • Drew Dowdell
    Drew Dowdell

    Moody's Cuts Ford to Junk Status

      ouch, right in the junk!...

    Moody's Investor Service has downgraded Ford to junk status rating of Ba1, one step below investment grade.  They say that Ford's cash flow and profit margins are below expectations and are expected to remain weak for the next two years.  Outside of the financial sector, Ford is one of the top 15 issuers of corporate bonds.

    The primary cause for concern is a cash crunch brought on by a lengthy restructuring plan that includes closing factories and laying off thousands of workers. Investors are not impressed with CEO Jim Hackett's plans to ditch sedans and revive an aging lineup of SUVs and trucks. All new versions of the Ford Explorer and Ford Escape debuted this year.

    Back in July, Ford issued a disappointing profit forecast as it struggles to compete in China's slowing car market. So far S&P Global Ratings and Fitch Ratings have an investment grade of BBB on Ford, however both firms have a negative outlook on Ford's future. 

    After the Moody's announcement, Ford's shares dived 4.2 percent to $9.14.

    Source: Automotive News



    User Feedback

    Recommended Comments



    Without the F150, Ford would be losing money.   They abandoned sedans, the Escape, Edge and Ecosport don't seem very competitive and will probably need incentives to move them, especially with any market downturn.  Lincoln doesn't have much volume.  I don't think Hackett's plan is very good.

    • Upvote 2

    Share this comment


    Link to comment
    Share on other sites
    5 minutes ago, smk4565 said:

    Without the F150, Ford would be losing money.   They abandoned sedans, the Escape, Edge and Ecosport don't seem very competitive and will probably need incentives to move them, especially with any market downturn.  Lincoln doesn't have much volume.  I don't think Hackett's plan is very good.

    One of the rare instances where we agree.  Lincoln's volume isn't sufficient to sustain the company no matter how good the new SUVs are.

    • Upvote 2

    Share this comment


    Link to comment
    Share on other sites

    And really Lincoln has 2 good SUVs, and the Navigator is like a #4 seller in a segment that isn't a lot of volume to begin with.  TBD how Aviator sells.  

    • Upvote 1

    Share this comment


    Link to comment
    Share on other sites

    The new escape and explorer can’t come at better times. I think the explorer will be a long term success. The escape is tbd. I think they may have made it too soft. The ecosport is trash but if the next one is good like the encore they may come out ok. The edge is the one that is quickly getting dated.  Ford is missing the big showroom draw.  Mustangs do and the trucks drive volume but otherwise there’s little compelling about ford. Saw a couple aviators the other day and I am optimistic about those. 

    Edited by regfootball
    • Upvote 1

    Share this comment


    Link to comment
    Share on other sites

    If Wall Street had its way, Ford would be facing liquidation any day now.  They do NOT believe in Ford as a healthy going concern.  It is all about the search for more money.

    Share this comment


    Link to comment
    Share on other sites
    1 hour ago, riviera74 said:

    If Wall Street had its way, Ford would be facing liquidation any day now.  They do NOT believe in Ford as a healthy going concern.  It is all about the search for more money.

    While true... Ford is definitely threading a needle here. The Explorer really must launch without any issues. F-150 is up next and they can't flub it. I fear they've already lost direction on the Escape and Ecosport. 

    • Like 1

    Share this comment


    Link to comment
    Share on other sites

    The last time Ford ‘flubbed’ the F-150 to any degree was the ‘soft’ design of the ‘97s, and was pretty minor from a business case.

    Share this comment


    Link to comment
    Share on other sites
    6 minutes ago, balthazar said:

    The last time Ford ‘flubbed’ the F-150 to any degree was the ‘soft’ design of the ‘97s, and was pretty minor from a business case.

    There was a lot of noise from the press and naysayers about the switch to aluminum body and bed w/ the '15 redesign, but it seems to have done well in the market.

    Share this comment


    Link to comment
    Share on other sites

    Lincoln is a great example - big margins per vehicle but low volumes. This is the strategy that seems to be chased by GM and Ford - hike prices to the point where volume really suffers or big risk financing is required to move metal. Looks good to profitability but volume and cashflow will continue to fall as a result. Cut models that you don't feel like competing in anymore - may have had thin margins but they could move generate cashflow and revenue. These vehicles that are being cut actually do a lot of damage to the reputation and strength of the company - cutting out whole swaths of customers that might be able to one day afford and move up to one of the big margin vehicles. Seems like a death spiral strategy. 

    Perhaps the smarter strategy would have been to let silicon valley take the finanical risk on autonomy and maybe even electrics - then adopt an industry standard and harness partnering and JVs to bring it into the big fleet. What I see instead are a bunch of companies throwing money around on things that have yet to be standardized (a LOT of parallel R&D) and yet to be proven as having any sufficient customer demand.  

    • Upvote 1

    Share this comment


    Link to comment
    Share on other sites
    41 minutes ago, texas99alpha said:

    Lincoln is a great example - big margins per vehicle but low volumes. This is the strategy that seems to be chased by GM and Ford - hike prices to the point where volume really suffers or big risk financing is required to move metal. Looks good to profitability but volume and cashflow will continue to fall as a result. Cut models that you don't feel like competing in anymore - may have had thin margins but they could move generate cashflow and revenue. These vehicles that are being cut actually do a lot of damage to the reputation and strength of the company - cutting out whole swaths of customers that might be able to one day afford and move up to one of the big margin vehicles. Seems like a death spiral strategy. 

    Perhaps the smarter strategy would have been to let silicon valley take the finanical risk on autonomy and maybe even electrics - then adopt an industry standard and harness partnering and JVs to bring it into the big fleet. What I see instead are a bunch of companies throwing money around on things that have yet to be standardized (a LOT of parallel R&D) and yet to be proven as having any sufficient customer demand.  

    Ford has outsourced their AV work to a company call Argo.  VW uses the same company. 

    • Upvote 1

    Share this comment


    Link to comment
    Share on other sites
    33 minutes ago, A Horse With No Name said:

    Wait until the electric aluminium F150's get here...

    Right! :metal: 

     

     

    • Upvote 1

    Share this comment


    Link to comment
    Share on other sites
    19 hours ago, Drew Dowdell said:

    Ford has outsourced their AV work to a company call Argo.  VW uses the same company. 

    But I thought that Ford was rehabbing the train station in Corktown to be the epicenter of their AV and "innovation" activity.

    Share this comment


    Link to comment
    Share on other sites
    15 minutes ago, texas99alpha said:

    But I thought that Ford was rehabbing the train station in Corktown to be the epicenter of their AV and "innovation" activity.

    Maybe that's for the future... but right now, Argo is doing their AV research. They're here in Pittsburgh and I see the Argo AV Ford Fusions all the time. 

    • Thanks 1

    Share this comment


    Link to comment
    Share on other sites

    I don’t think Ford is going to roll over, but they are going to hurt, Truck and Explorer sales, along with the success of the Bronco should them the keep their footing. Dropping the the price on the Ranger/pushing for more commercial use will also help.

    The Fusion really doesn’t need to stick around to at least give the person who does not want the pay the money/want the size can still drive a car. Focus and Tarusus won’t be missed much.....

    The Ecosport is okay, though they are starting to lease them like Nissan leases everything...

    Any guys that enjoyed driving the last gen of Escape will be leaving with the 2020 one. I kinda clones the Mazda CX-5, which would normally not be a bad thing. Except people still would still like to use it for outdoory type things, like camping, and some very soft “off-roading”. The new one won’t even have roof racks....(at least from the new ones I have seen) Not sure how well it will do.....

    • Upvote 1

    Share this comment


    Link to comment
    Share on other sites
    10 hours ago, daves87rs said:

    Any guys that enjoyed driving the last gen of Escape will be leaving with the 2020 one. I kinda clones the Mazda CX-5, which would normally not be a bad thing. Except people still would still like to use it for outdoory type things, like camping, and some very soft “off-roading”. The new one won’t even have roof racks....(at least from the new ones I have seen) Not sure how well it will do.....

    I agree and they probably do as well and that's why they have the "baby bronco" to fill that spot. It'll be on the same platform as the Escape and I'm assuming it'll actually have the same wheelbase, just all new body panels and some off road goodies. 

    • Upvote 2

    Share this comment


    Link to comment
    Share on other sites
    15 hours ago, ccap41 said:

    I agree and they probably do as well and that's why they have the "baby bronco" to fill that spot. It'll be on the same platform as the Escape and I'm assuming it'll actually have the same wheelbase, just all new body panels and some off road goodies. 

    And the Bronco again saves the day.. 🙂  Let’s hope they don’t overprice it like the Ranger....

    • Upvote 1

    Share this comment


    Link to comment
    Share on other sites
    10 hours ago, daves87rs said:

    And the Bronco again saves the day.. 🙂  Let’s hope they don’t overprice it like the Ranger....

    Given it's niche nature, I bet they will go premium w/ the pricing like the Wrangler and Gladiator...I'd assume it will be priced higher than the Ranger.

    Edited by Robert Hall
    • Sad 1

    Share this comment


    Link to comment
    Share on other sites
    8 hours ago, daves87rs said:

    And the Bronco again saves the day.. 🙂  Let’s hope they don’t overprice it like the Ranger....

    I expect it to be very very similar to the Wrangler.. 

    Share this comment


    Link to comment
    Share on other sites
    12 hours ago, ccap41 said:

    I expect it to be very very similar to the Wrangler.. 

    Let’s hope for a wide range of models then......

    Share this comment


    Link to comment
    Share on other sites
    4 hours ago, Drew Dowdell said:

    I wonder if Moody's knew about the Explorer Aviator issue before it was publicized. 

    Internal whistle blower??? 🤔

    Share this comment


    Link to comment
    Share on other sites
    27 minutes ago, dfelt said:

    Internal whistle blower??? 🤔

    I couldn't have gone unnoticed that Ford was trucking Explorers from Chicago to Flat Rock instead of to dealerships. 

    • Like 1

    Share this comment


    Link to comment
    Share on other sites



    Join the conversation

    You can post now and register later. If you have an account, sign in now to post with your account.
    Note: Your post will require moderator approval before it will be visible.

    Guest
    Add a comment...

    ×   Pasted as rich text.   Paste as plain text instead

      Only 75 emoji are allowed.

    ×   Your link has been automatically embedded.   Display as a link instead

    ×   Your previous content has been restored.   Clear editor

    ×   You cannot paste images directly. Upload or insert images from URL.




  • Similar Content

    • By Drew Dowdell
      Ford is recalling 338,332 Ford Explorers across North America for an improperly formed seat frame edge. The recall covers certain 2017 model year Explorers. The seat frame edge is sharp and could cause injury if driver or passenger reaches between the center console and the seat.  Ford is aware of 31 reports of hand injuries related to this recall. Dealers will install a flocked tape and a tab on the inside edge of the power seat frame. 

      View full article
    • By Drew Dowdell
      Ford is recalling 338,332 Ford Explorers across North America for an improperly formed seat frame edge. The recall covers certain 2017 model year Explorers. The seat frame edge is sharp and could cause injury if driver or passenger reaches between the center console and the seat.  Ford is aware of 31 reports of hand injuries related to this recall. Dealers will install a flocked tape and a tab on the inside edge of the power seat frame. 
    • By Drew Dowdell
      The Ford Explorer hybrid got its EPA ratings finally. They're an improvement over the base 2.3 liter 4-cylinder delivering 27 city, 29 highway, 28 combined for the most efficient RWD model. That is an improvement of 6 mpg for city and 4 mpg combined. The AWD model comes in a bit lower at 23 city, 26 highway, and 25 combined. Unlike the Lincoln Aviator GT, the Ford Explorer Hybrid is not a plug-in model. 
      Powered by a 3.3 liter V6 plus the electrified drive train, the Explorer hybrid has a lot more power than the 4-cylinder with 318 horsepower and 322 lb-ft of torque. It comes with the same 10-speed automatic that all Explorers come with. Compared to the 2.3 liter turbo with 300 hp and 310 lb-ft of torque, we expect the Hybrid to feel faster and more refined due to the extra torque at the low end from the electric motor. 
      The Explorer Hybrid has more power and torque than its only direct competition, the Toyota Highlander Hybrid.  The Highlander does slightly better in fuel economy, but comes up 1,500 lbs short in towing capacity, though the next generation Highland Hybrid is supposed to get 34 mpg in front-wheel drive form.
      The Explorer Hybrid is available as a Limited trim model and starts at $51,780 after delivery charge, a $3,555 increase over an equivalent Limited trim. 
       

      View full article
    • By Drew Dowdell
      The Ford Explorer hybrid got its EPA ratings finally. They're an improvement over the base 2.3 liter 4-cylinder delivering 27 city, 29 highway, 28 combined for the most efficient RWD model. That is an improvement of 6 mpg for city and 4 mpg combined. The AWD model comes in a bit lower at 23 city, 26 highway, and 25 combined. Unlike the Lincoln Aviator GT, the Ford Explorer Hybrid is not a plug-in model. 
      Powered by a 3.3 liter V6 plus the electrified drive train, the Explorer hybrid has a lot more power than the 4-cylinder with 318 horsepower and 322 lb-ft of torque. It comes with the same 10-speed automatic that all Explorers come with. Compared to the 2.3 liter turbo with 300 hp and 310 lb-ft of torque, we expect the Hybrid to feel faster and more refined due to the extra torque at the low end from the electric motor. 
      The Explorer Hybrid has more power and torque than its only direct competition, the Toyota Highlander Hybrid.  The Highlander does slightly better in fuel economy, but comes up 1,500 lbs short in towing capacity, though the next generation Highland Hybrid is supposed to get 34 mpg in front-wheel drive form.
      The Explorer Hybrid is available as a Limited trim model and starts at $51,780 after delivery charge, a $3,555 increase over an equivalent Limited trim. 
       
    • By Drew Dowdell
      Ford is acknowledging the trouble prone Ford Powershift transmission and is extending the warranties on them.  The 6-speed transmission is a dual clutch setup meant to increase fuel economy in Ford's smallest cars.  While a solid idea on paper, customers reported a number of problems with them including slippage, hesitations while accelerating, jerkiness through the gears, difficulty downshifting, and premature wear on the clutch packs. 
      The extended warranty will cover 2014 - 2016 model year Ford Focus, and 2014 - 2015 model year Ford Fiesta and will increase the warranty coverage of the clutch from five years/60,000 miles to seven years/100,000 miles.  Ford will also reimburse customers in this group who have already paid for clutch repairs out of pockets.  The transmission control module will also be warrantied to 10 years/150,000 miles. 
      In addition to that, there is a small group of customers (16%) who need a software update which Ford will provide for free. 
      Affected customers will receive a letter from Ford with instructions on how to proceed.

      View full article
  • Posts

  • Social Stream

  • Today's Birthdays

    1. smithrobs
      smithrobs
      (48 years old)
  • Who's Online (See full list)

  • My Clubs

About us

CheersandGears.com - Founded 2001

We ♥ Cars

Get in touch

Follow us

Recent tweets

facebook

×
×
  • Create New...