After a tumultuous six years in Dearborn Michigan, Ford received news from Moody’s Investors Services this afternoon that its credit level has been bumped up from junk to investment grade. This effectively closes one of the roughest chapters in the Blue Oval’s history but there are still a few more hoops to jump through before everything can be put completely to rest. Moody’s recent endorsement is the second of such kind in less than two months,as Fitch Ratings also restored Ford’s credit level to investment grade in April. Standard & Poor’s still has Ford down below investment grade.
Back in 2006, Ford stopped just short of mortgaging the figurative farm to stave off bankruptcy, but it did offer up the iconic blue oval logo and other assets as collateral. This helped the Dearborn-based automaker to raise $23.5 billion which saved Ford from being bailed out from the government. By avoiding government assistance, Ford has been able to work its way back to ownership of its assets, including the blue oval, rather quickly.
“When we pledged the Ford Blue Oval as part of the loan package, we were not just pledging an asset. We pledged our heritage,” said Bill Ford, executive chairman, Ford Motor Company in a prepared statement. “The Ford Blue Oval is one of the most recognized symbols in the world, and it is a source of great pride and passion, both inside and outside our company. Getting the Ford Blue Oval back feels amazing, and it is one of the best days that I can remember.”
Upon receiving the news of Ford’s credit level returning to investment grade, Bill Ford Jr. took to the automaker’s in-house intercom system, which is usually only used for fire drills, to tell employees about the news.
“By definition, today is also a once-in-a-lifetime event, which I couldn’t be happier about,” Bill Ford said to Automotive News.”When we pledged the Blue Oval, it was enormously emotional for me and my family,” Bill Ford said. “We weren’t just pledging an asset, we were pledging our heritage. It feels wonderful.”
Even with the recent good news, it’s still business as usual in Dearborn. At a recent annual meeting Bill Ford and other executives backed current Ford CEO Alan Mulally’s performance and didn’t provide a timetable for when he will retire.
“Clearly it is a very significant milestone, but it changes none of my plans to continue to serve this great corporation,” said Mulally to Automotive News.
Bob Shanks, Ford’s CFO as of April 1 of this year, echoed Mulally’s sentiments. “Operationally, it doesn’t have too much effect,” Shanks said to Automotive News. “We had pledged the assets but it hadn’t affected our operational flexibility. We will see a reduction in our borrowing rates.”
What say you? Are you happy about Moody’s ruling to restore Ford’s credit line to investment grade? Tell us where you stand in the comment section below.