Ford Cut to Junk by Moody’s

Ford's stock initially outperformed indexes but faced a hit after Moody's downgraded its rating, citing challenges and weak earnings. Despite this, Moody's improved its outlook to stable. Ford's CEO, Jim Hackett, is implementing a costly restructuring plan. The company remains confident in its strategy, emphasizing its strong business fundamentals and liquidity. Ford's investment grade status is crucial, as further downgrades could affect its position in bond indexes. The company faces pressure in China and from its sedan models, but it remains optimistic about avoiding further downgrades.

What was the main reason for Moody's downgrade of Ford's credit rating?

• The CEO's effective promotion of the plan

• Ford's successful market performance

• The company's lengthy and costly restructuring plan

• Ford's strong earnings and cash generation

How did Ford respond to the credit rating downgrade?

• By withdrawing from the Chinese market

• By cutting more jobs

• By announcing a new CEO

• By expressing confidence in their plan and progress

What is one of the challenges Ford is facing in the market?

• Excessive liquidity

• Strong competition in the Chinese market

• Increasing demand for their sedan models

• High profits in the last quarter

What is the potential consequence if Ford's credit rating is further downgraded?

• It would receive more favorable interest rates

• It would be removed from some investable bond yield indexes

• It would increase its corporate debt

• It would be included in more investable bond indexes

What aspect of Ford's turnaround plan has not been well-received?

• Expanding into new markets

• Overhauling sedan models

• Increasing job opportunities

• Raising their credit rating