Ford earns improved Fitch rating 0

The financial aspect of Ford took a positive step today. Fitch ratings have upgraded the company to investment grade. This will allow Ford’s repayment costs down to a minimum.  The upgrade was down to Ford’s improvement since their near bankruptcy back in 2006.

Ford’s One Plan

Ford’s “One Ford” plan has brought around a lower breakeven point for the company. Ford have since added some of the best and most desired car technology into their improved car line up and brought around a reduction of risk upon it’s pension scheme.

Ford’s financial ratings improved

Ford’s debt is now making progress from it being rated as junk, a rating which meant higher payback costs. This also meant that the company had a bad reputation when attempting to borrow from banks.  Ford can now take out loans with lower borrowing costs. If another credit company were to upgrades Ford’s financial rating, it would significantly help the company in the amount that it has to repay.

Fitch statement

Fitch Ratings released a statement saying “Fitch believes that the work that has been accomplished has put the company in a solid position to withstand the significant cyclical and secular pressures faced by the global auto industry.”

Ford’s Blue Oval

Alan Mulally took drastic steps to borrow money when he took over in 2006. This included mortgaging Ford’s assets of it’s Blue Oval, an intellectual property of the company. This was done in an attempt to borrow £14 billion in order to turn the company around.

Ford reclaiming the famous Blue Oval symbol, a logo that appears on all of Ford vehicles would be a majorly positive step for the company.

Alan Mullaly wishes to continue unifying Ford’s business units, which were previously unattached. He also aims to drive down costs across the board.

More on the way?

Ford may have their ratings upgraded by the other two major ratings agencies later on this year. The last time this occurred was back in 2005. It is hoped that if more borrowing costs are driven down then they will be nicely passed on to Ford’s customers. With Ford vehicles being cheaper, it will then naturally allow room for more sales.

Ford have managed to cleverly change their scope and invest in economical cars. The Focus and Fusion are great examples, with them being some of Ford’s best sellers around the world.