Moody's: Ford under review

Moody's Investors Service said it is reviewing the Baa3 long-term rating of Ford Motor Co. and the Baa2 long-term and prime-2 short-term ratings of Ford Motor Credit Co. for possible downgrade.

The Baa3 long-term and prime-3 short-term ratings of Hertz Corp. are affirmed and the outlook remains developing.

The review of Ford is prompted by the company's announcement that a worsening outlook for its North American automotive operations and the challenges faced by many of its suppliers have led to a further reduction in its 2005 guidance to $1.00 to $1.25 earnings per share, down from the $1.25 to $1.50 guidance released in April, Moody's noted.

Moody's said that the very significant and continued reduction in Ford's North American earnings outlook reflects the escalating competitive and cost challenges the company faces and the increasing difficulty Ford may have in delivering credit metrics that are supportive of the Baa3 rating by 2007.

Notwithstanding these challenges Moody's said that it recognizes important strengths and operational progress that Ford has made such as the company's $23 billion liquidity position.

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