Moody's Ups Ford's Debt Rating

Taking into account the projected earnings and financial performance of American manufacturer Ford, rating agency Moody's Investors Service increased the carmaker's ratings. Moody's bases its decision on the expected success of the Ford restructuring plan and on the recovery of the American automotive industry as a whole.

"We think that Ford now has a healthy and sustainable operating model," Bruce Clark, senior vice president at Moody's was quoted as saying by DetNews. "The cost side of the equation has largely been addressed by the massive restructuring."

"The revenue side of the equation is being addressed by the company's much more robust product portfolio."

Expecting Ford to generate more cash and reduce its debt, Moody's raised Ford's senior unsecured debt rating to B2 from B3. Even if it faces some risks worldwide, Ford is expected to be stable in the period to come.

"These risks include a slowdown in European auto demand that could be exacerbated by the fallout associated with the debt crisis in Greece, a possible escalation in the use of incentives in the United States, or a slowdown in the pace of the U.S. recovery," Moody's said.

For 2009, Ford reported a $2.7 billion net income, opposed to the $14.7 billion loss in 2008, marking the carmaker's first full-year profit since 2005. And this during a year battered by the economic crisis.

The profit earned by Ford last year took even Mulally by surprise, as he didn't anticipate an annual profit until 2011. Now that things seem to have turned around, all Ford execs see big dollars coming in 2010, with the company aiming to be profitable on a pre-tax basis.