Ford cut to junk by Moody's on doubts over plan to boost profit

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Thread: Ford cut to junk by Moody's on doubts over plan to boost profit

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    Ford cut to junk by Moody's on doubts over plan to boost profit


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    Re: Ford cut to junk by Moody's on doubts over plan to boost profit

    Wow - wasn't expecting to read something like this. I wasn't aware their outlook was trending towards them being cut to junk status.

    Not trying to stir the pot, legit question - what is GM and FCA doing that Ford isn't? Or, is a rating cut in the near future for both? Is it just their lagging in China, electrics and self driving or is there something more fundamental?

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    Re: Ford cut to junk by Moody's on doubts over plan to boost profit

    With car sales slowing and an economy possibly heading for a recession in the next couple of years it's not getting better quickly.

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    Re: Ford cut to junk by Moody's on doubts over plan to boost profit

    Certainly not good news for Ford, but it does say that their balance sheet and cash flow are solid. It will cost them more to borrow money though.

    The next year could be a difficult time. There's more than a few people (democrats, China) who would be happy to see the economy tank - and would be willing to help it do so - just to get Trump out of office.
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    Re: Ford cut to junk by Moody's on doubts over plan to boost profit

    Quote Originally Posted by BlackGTP View Post
    Wow - wasn't expecting to read something like this. I wasn't aware their outlook was trending towards them being cut to junk status.

    Not trying to stir the pot, legit question - what is GM and FCA doing that Ford isn't? Or, is a rating cut in the near future for both? Is it just their lagging in China, electrics and self driving or is there something more fundamental?
    Ford's outlook and profit forecast is not meeting the expectation of financial advisers even though it's spending a bomb on upgrading products in the next two years and correcting problems in Europe and China, places like Moodys can't see that yet because they're kind of a lagging indicator.

    Until Ford actually turns a corner in the above, the commentary is going to remain how they did last quarter.....

    Conversely, GM killing car sales and closing four US plants while boosting utility production from low cost Mexican plants has executed a stunning reversal of fortunes in double quick time. One thing you can count on from GM is the moment they get their SH together, they are a gold mine, a license to print billions at will.
    Last edited by jpd80; 09-10-2019 at 08:21 AM.

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    Re: Ford cut to junk by Moody's on doubts over plan to boost profit

    For all the "Ford uber alles" talk on GMI that would lead you to believe that all is rosy in Dearborn, the fact is that outside of pickup sales, they've actually posted a lot of disappointing results.
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    Re: Ford cut to junk by Moody's on doubts over plan to boost profit

    Quote Originally Posted by BlackGTP View Post
    Not trying to stir the pot, legit question - what is GM and FCA doing that Ford isn't?
    It's more what GM and FCA have already done: address long standing organizational and operations related issues. Ford has done that too, but it's not as far along in that regard compared to GM and FCA. The bankruptcies experienced by the latter two a decade ago was a blessing in a way - they forced GM and FCA to be very aggressive in restructuring their respective business operations.
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    Re: Ford cut to junk by Moody's on doubts over plan to boost profit

    Quote Originally Posted by ksr View Post
    For all the "Ford uber alles" talk on GMI that would lead you to believe that all is rosy in Dearborn, the fact is that outside of pickup sales, they've actually posted a lot of disappointing results.
    Yes, the calm before the storm, where Ford all but replacing lost sales due to ending cars. Ford will not roll over new products from Mexico until about this time next year.
    At the moment, these changes going on at Ford plants,
    1. Explorer and Aviator still ramping up
    2. Escape about to change product cycle.
    3. F 150 and Super Duty changes in Q4

    Stunning result from F Series, over 75,000 sales, Ranger close to 10,000, Transit over 16,000

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    Re: Ford cut to junk by Moody's on doubts over plan to boost profit

    FCA outsold Ford in August in US.

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    Re: Ford cut to junk by Moody's on doubts over plan to boost profit

    Quote Originally Posted by gkr778 View Post
    It's more what GM and FCA have already done: address long standing organizational and operations related issues. Ford has done that too, but it's not as far along in that regard compared to GM and FCA. The bankruptcies experienced by the latter two a decade ago was a blessing in a way - they forced GM and FCA to be very aggressive in restructuring their respective business operations.
    The bankruptcies wiped out a lot of debt. It was a blessing, at least for the companies if not the taxpayers.
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    Re: Ford cut to junk by Moody's on doubts over plan to boost profit

    Quote Originally Posted by ksr View Post
    Certainly not good news for Ford, but it does say that their balance sheet and cash flow are solid. It will cost them more to borrow money though.

    The next year could be a difficult time. There's more than a few people (democrats, China) who would be happy to see the economy tank - and would be willing to help it do so - just to get Trump out of office.
    Read the article. A Ford spokesperson says the balance sheet and cash flow are solid. The rating analysts obviously disagree. Junk bond status is not good at all.

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    Re: Ford cut to junk by Moody's on doubts over plan to boost profit

    I'd say that I'd rather be in junk status than go to Washington DC with my tail dragging and a cup out to the government asking for bailout money...
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    Re: Ford cut to junk by Moody's on doubts over plan to boost profit

    Quote Originally Posted by LowRider View Post
    Read the article. A Ford spokesperson says the balance sheet and cash flow are solid. The rating analysts obviously disagree. Junk bond status is not good at all.
    Thanks LowRider, that prompted me to review Ford's most recent balance sheet and cash flow statements. A few highlights from the 2Q 2019 10-Q Report:

    Balance sheet:
    • Current assets as of June 30, 2019: $118,351M, of which $22,117M were cash/cash equivalents
    • Current liabilities as of June 30, 2019: $98,334M
    • Total assets as of June 30, 2019: $262,184M
    • Total liabilities as of June 30, 2019: $226,048M


    Cash flow statement:
    • Cash flow from operating activities for the period ended June 30, 2019: $10,007M
    • Cash flow from investing activities for the period ended June 30, 2019: $-3,824M
    • Cash flow from financing activities for the period ended June 30, 2019: $-808M
    • Effect of exchange rate changes on cash, cash equivalents, and restricted cash: $24M
    • Net increase in cash, cash equivalents, and restricted cash: $5,399M


    So the Ford spokesperson is correct. At the same time, analysts are correct as well - Ford's restructuring efforts, already criticized for their slow pace, are being hamstrung by global macroeconomic factors.
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    Re: Ford cut to junk by Moody's on doubts over plan to boost profit

    Quote Originally Posted by ksr View Post
    For all the "Ford uber alles" talk on GMI that would lead you to believe that all is rosy in Dearborn, the fact is that outside of pickup sales, they've actually posted a lot of disappointing results.
    GM is on point for the "money people" BUT doing little for the FANS / Americans

    FORD is doing a LOT for Americans / CAR FANS - all moves NOT good for the "money" people

    China and Mexico is GOOD for Wall ST along with PLANT CLOSURES

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    Re: Ford cut to junk by Moody's on doubts over plan to boost profit

    Quote Originally Posted by richmond2000 View Post
    GM is on point for the "money people" BUT doing little for the FANS / Americans

    FORD is doing a LOT for Americans / CAR FANS - all moves NOT good for the "money" people

    China and Mexico is GOOD for Wall ST along with PLANT CLOSURES
    I'm not real happy with a lot of what GM is doing. But Ford is doing "a LOT" for "CAR FANS?" By cutting every car but the Mustang?
    Last edited by ksr; 09-10-2019 at 12:36 PM.
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