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GM, Ford Motor Debt Ratings Cut to Junk by Moody's
At first glance it looks like Ford and GM are signaling they're going to go belly-up unless they move production overseas...but I think what they're really saying is they're going to go belly-up and avoid paying pensions and benefits to thousands of active and retired workers.
Compassionate capitalism.
In any event, I wouldn't pay much attention to this story. The real danger is Hugo Chavez. We must ice that fucker for jesus and the american way.
General Motors Corp. and Ford Motor Co., the two biggest U.S. automakers, were lowered to junk by Moody's Investors Service.
Moody's lowered General Motors Corp.'s rating two levels to Ba2 and the rating on its finance arm to Ba1. Dearborn, Michigan-based Ford was cut one level to Ba1, one step below investment grade. Moody's also reduced its rating on Ford Motor Credit Co. to the lowest investment grade. The Ford cuts affect about $150 billion in debt, Moody's said in a statement today.
It's the second junk rating for Ford after Standard & Poor's lowered the company to non-investment grade on May 5. That will push the automaker out of the most widely followed investment-grade bond index by Lehman Brothers Holdings Inc. and may spark selling of the bonds.
Chief Executive William Clay Ford Jr., 48, saw his company's share of the U.S. auto market fall for 28 straight months through June. In July, sales rose 29 percent after the company offered employee-pricing discounts to all consumers.
Ford faces ``continued challenges in addressing its uncompetitive cost structure in North America,'' Moody's said. Ford's North American operations have lost money three of the past four quarters.
Ford Chief Financial Officer Don Leclair said in a statement today that the downgrade ``is disappointing.'' He said the action ``doesn't shake our determination to achieve continued success as a global automaker. We recognize many of the challenges Moody's cited and remain committed to accelerating our business plan.''
Moody's lowered General Motors Corp.'s rating two levels to Ba2 and the rating on its finance arm to Ba1. Dearborn, Michigan-based Ford was cut one level to Ba1, one step below investment grade. Moody's also reduced its rating on Ford Motor Credit Co. to the lowest investment grade. The Ford cuts affect about $150 billion in debt, Moody's said in a statement today.
It's the second junk rating for Ford after Standard & Poor's lowered the company to non-investment grade on May 5. That will push the automaker out of the most widely followed investment-grade bond index by Lehman Brothers Holdings Inc. and may spark selling of the bonds.
Chief Executive William Clay Ford Jr., 48, saw his company's share of the U.S. auto market fall for 28 straight months through June. In July, sales rose 29 percent after the company offered employee-pricing discounts to all consumers.
Ford faces ``continued challenges in addressing its uncompetitive cost structure in North America,'' Moody's said. Ford's North American operations have lost money three of the past four quarters.
Ford Chief Financial Officer Don Leclair said in a statement today that the downgrade ``is disappointing.'' He said the action ``doesn't shake our determination to achieve continued success as a global automaker. We recognize many of the challenges Moody's cited and remain committed to accelerating our business plan.''
Compassionate capitalism.
In any event, I wouldn't pay much attention to this story. The real danger is Hugo Chavez. We must ice that fucker for jesus and the american way.
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