Ford Motor is a global producer and distributor of cars and trucks. Ford’s automotive business operates through its business segments of Ford Blue, Ford Pro, Ford Model e, and Ford Motor Credit Company, which provides financial services. Ford has a dominant market position in the USA where it generates about 67% of its revenues in 2022.
In late October Ford reached a tentative agreement with the labor union which got ratified on November 2023. This agreement is supporting the company’s 2024 business outlook which suffers from an estimated USD 1.7bn EBIT-adjusted impact from lost production that was caused by the UAW strike.
S&P upgraded Ford from BB+ to BBB- on 30 October, which led to migration from HY to IG indices. S&P said they expect Ford’s margins to exceed their upgrade target of 8% in 2024 and 2025 as cost reductions over this time will more than offset higher labor-related costs.
Following the migration to IG, Ford’s credit outlook moved to stable which is subject to negative change upon economic slowdown that curtails consumer auto demand.