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Fitch cuts Ford view to negative
Fitch Ratings said it revised the outlook of Ford Motor Co., Ford Motor Credit Co., Hertz Corp. and related entities to negative from stable.
Fitch said the outlook revision reflects the effect of further production cutbacks on Ford's consolidated operating results, continuing price competition in key market segments, shifting consumer buying patterns away from mid-size and large SUVs (which have comprised a significant component of Ford's automotive profitability) and cost pressures. These factors have further compressed margins, already weak for the rating category, and Ford now expects automotive operations to be breakeven at best.
Future rating decisions will focus on Ford's ability to restore margins through stabilization of market shares, the ability to retain pricing on new and recent product introductions, and further success in cost reduction programs, the agency said.
Ratings with a negative outlook include Ford Motor Co.'s senior debt at BBB+ and preferred stock at BBB-; Ford Motor Credit Co.'s senior debt at BBB+; and The Hertz Corp.'s senior debt at BBB+, among other subsidiaries of the companies.
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