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March 10, 2003

USA: Ford says finances strong, revitalisation on track – report

According to Associated Press (AP), Ford said late on Friday that its finances are sound and its revitalisation plan on track despite an analyst report that the car maker could be forced into bankruptcy. AP noted that, in a recent edition of Grant's Interest Rate Observer, Sean Egan of the independent credit rating agency Egan-Jones offered eight reasons why a bankruptcy filing was a possibility for Ford, including multibillion-dollar pension fund liabilities and other obligations.

By bcusack

According to Associated Press (AP), Ford said late on Friday that its finances are sound and its revitalisation plan on track despite an analyst report that the car maker could be forced into bankruptcy.

AP noted that, in a recent edition of Grant’s Interest Rate Observer, Sean Egan of the independent credit rating agency Egan-Jones offered eight reasons why a bankruptcy filing was a possibility for Ford, including multibillion-dollar pension fund liabilities and other obligations.

The London newspaper the Daily Telegraph reported a similar story on Friday, AP added.

“If it didn’t have the name Ford, it would be in bankruptcy right now,” Egan told Grant’s, AP said.

Ford spokeswoman Marcey Evans on Friday told AP that Egan’s analysis was “seriously flawed” and that Ford is “fundamentally strong.”

Evans told AP that Ford has $US25 billion in cash, has gained market share of late in the United States and continues to reduce costs. On the automotive side, she said, the company’s debt payments amount to $1 billion in the next five years.

AP noted that Ford, which is more than one year into a five-year revitalisation program, has continually said its pension obligations are manageable.

AP said that, in response to market rumours that a downgrade may be forthcoming, Standard & Poor’s on Friday affirmed its long-term and short-term credit ratings on Ford, its finance arm and other related entities. Its rating on Ford is near the bottom of the investment-grade scale.

AP said that Moody’s on Friday also affirmed its ratings for Ford, saying the car maker appears to be making progress in its turnaround, though Moody’s maintained a negative ratings outlook.

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