Moody's: Ford outlook stable

Moody's Investors Service said it affirmed Ford Motor Co.'s B3 corporate family and probability-of-default ratings, Ba3 senior secured rating and Caa1 senior unsecured rating. Moody's also raised the issuer's speculative grade liquidity rating to SGL-1 from SGL-3.

The agency affirmed Ford Motor Credit Co.'s B1 senior unsecured rating.

The outlook was changed to stable from negative.

Ford announced details of its newly ratified four-year labor agreement with the United Auto Workers, which prompted the actions, according to Moody's.

"Over the long term the new contract will help to significantly reduce Ford's wage and health care costs," Bruce Clark, senior vice president with Moody's, said in a written statement.

"The cash flow benefits of the new contract will not really take hold until 2010," Clark said. "As a result, we still expect that through 2008 Ford's operating cash flow will be significantly negative and its credit metrics will remain weak."

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