Ford regains its credit rating and famous logo
Stephen Foley is a former Associate Business Editor of The Independent, based in New York. He left in August 2012. In a decade at the paper, he covered personal finance, the UK stock market and the pharmaceuticals industry, and had also been the Business section's share tipster. Between arriving with three suitcases in Manhattan in January 2006 and his departure, he witnessed and reported on a great economic boom turning spectacularly to bust. In March 2009, he was named Business and Finance Journalist of the Year at the British Press Awards.
Thursday 24 May 2012
Ford has reclaimed control over its famous blue oval, six years after it mortgaged the logo and a host of other assets in a desperate attempt to avert bankruptcy.
The restoration marks the symbolic return to health of the Detroit car maker and comes after the company turned in its highest quarterly profit from its North American division since 2000.
The credit rating agency Moody's certified Ford's debt as investment grade, becoming the second rating agency to do so and triggering the restoration of the logo and other assets Ford had pledged to its lenders in a ground-breaking financial deal in 2006.
The pledge unlocked $2.35bn (£1.49bn) in new loans at what was almost the last minute before credit markets froze and the US plunged into a deep recession. Ford, until 2006 the weakest of the "big three" Detroit car makers, was able to stay afloat thanks to the loans, while crosstown rivals General Motors and Chrysler went bankrupt and had to be rescued by the US taxpayer.
Ford never stopped using the blue oval logo, or any of the other assets it pledged, which included factories and the trademarks of its F-150 pick-up truck and Mustang sports car, but the risks of losing them weighed heavily on the company as it sought cost cuts to restore the business to health, the chairman, Bill Ford said.
"This is one of the best days that I can remember," he said, on a conference call with reporters to celebrate the return of the assets. "This is enormously emotional for me personally and for my family." Mr Ford is the great-grandson of Henry Ford, who founded the company and approved the first versions of the logo.
Bruce Clark, senior vice president at Moody's, said: "The key factor in our considering an investment-grade rating for Ford was whether or not the company would be able to sustain its strong performance. We concluded that the improvements Ford has made are likely to be lasting."
Ford's European arm has slipped back into the red but in North America it has slashed production to profitable levels.
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