FB News

Carmaking family business Ford to 'stick to plan?

By Rashmi Kumar

Ford Motors, the only American carmaking giant that didn’t take bailout money during the financial crisis, is to stick to its turnaround plan, following an upgrade by a top credit rating agency.

“We have a plan – the One Ford Plan – and we are sticking to it,” a spokesman for the family-controlled automaker told CampdenFB.

His comments follow a move by Fitch Ratings, one of three major ratings agencies, to upgrade Ford’s debt status, ending a seven-year period in which the group’s debt was classified as “junk”.

“Receiving an investment grade rating from Fitch is a positive reflection on the progress Ford has made in implementing the One Ford plan over the past several years,” added the spokesman.

The revival plan, put in place by non-family chief executive Alan Mullaly (pictured) when he took the top position in 2006, involves unifying the carmaker’s various business units, drive down costs and improve profits.

It seems to have paid off, as the business returned to profit in 2009, following a loss of around $15 billion the previous year.

“Over time, we would expect the upgrade to have a positive effect on borrowing costs for Ford and for Ford Credit,” said the spokesman.

The upgrade in credit status follows a recent move by the family business to resume paying dividends after almost five years. In December 2011, the US’s second-biggest automaker said it will pay quarterly dividends, thanks to its improved financial strength.

Chaired by fourth-gen Bill Ford, the group had 2010 revenues of $128.9 billion, up from $116.2 billion in 2009. Bill works alongside four other family members and they collectively control 40% of Ford’s voting rights.