Fitch lowers Ford, Hertz

Fitch Ratings said it downgraded the senior unsecured debt of Ford, Ford Credit and various affiliates to BBB- from BBB.

The agency noted ratings on the Capital Trust II securities have been downgraded to BB from BB+.

Fitch said it also affirmed the F2 commercial paper ratings and lowered the ratings of Hertz have to BBB- from BBB and remain on Rating Watch Evolving.

The downgrade of Ford reflects the deteriorating profitability of Ford's North American operations, most recently affected by new pricing initiatives, higher commodity costs and supplier issues, while the Hertz downgrade solely represents its ownership by Ford, the agency said.

Along with the sharp decline in large and mid-size SUVs during 2005 and cash outflows related to restructuring activities, Fitch said it expects that cash flow will remain negative through 2005 and potentially into 2006.

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