Moody's affirms Ford ratings

Moody's Investors Service said it affirmed the ratings of Ford Motor Co. (senior at Baa1), Ford Motor Credit Co. and its subsidiaries (senior at A3 and short-term at Prime-2), and The Hertz Corp. (senior at Baa2 and short-term at Prime-2).

The outlook remains negative.

Moody's said the affirmation of the Ford ratings reflect the steady progress that the company has made in achieving key operational, competitive and financial benchmarks since the 2002 initiation of its revitalization program.

Moody's anticipates that Ford will make further progress through 2006, particularly in the increasingly critical areas of new product launches, and product quality. The company should also benefit from the U.S. economic recovery. As a result, Ford's automotive earnings, cash generation and debt protection measures should continue to strengthen. This should help keep the automotive operations on track for meeting its 2006 objective of $4.0 billion in profit before taxes, and approximately $3.0 billion in free cash flow (cash flow after capital expenditures, common dividends, required pension plan contributions, but prior to dividends from Ford Credit and any extraordinary sources/uses of funds).

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