After several years of financial turmoil and a credit downgrade in 2005, things are looking up for Ford Motor Co. Unlike its rivals Chrysler and GM, Ford was able to avoid bankruptcy a few years back by taking out a massive restructuring loan. With much of the loan repaid and profitability slowly returning, Fitch Ratings has bumped the automaker’s credit from “junk” status to “investment” grade.
Big Boost In Confidence
In 2006, Ford Motor Co. mortgaged its logo, factories and equipment in a risky move to obtain a $23.5 billion restructuring loan. One of the biggest risks of the move was freeing up the use of their logo, the recognizable blue oval. Estimated to be worth around $7.5 billion, getting the blue oval back is said to have an “enormous psychological” impact on the company after several years of hard work to straighten out their finances.
Now that Ford Motor Co. has turned a corner and begun to show signs of financial stability, they have been able to take a leap up the ladder. Their once junk status was officially upgraded to “BBB minus”, the lowest of the investment-grade ratings. Ford is still waiting on two other rating agencies, Standard & Poor and Moody’s, to make their move, but are hopeful that this rating boost will only continue a positive trend back to profitability.