TEXT-S&P: Ford names COO, CEO through 2014, no rating effect
Nov 5 - As Standard & Poor's Ratings Services previously announced, on Nov. 1, 2012, we said that Ford Motor Co.'s (BB+/Positive/--) announcement that Mark Fields will become chief operating officer (COO) and that CEO Alan Mulally will remain CEO until at least 2014 has no impact on the rating or outlook. The position of COO is a new one, but we assume that Ford's primary strategies that it established and executed over the past few years will continue. We view the continuity of Mr. Mulally through at least 2014 as important in view of what we assume is a dim outlook for European auto sales next year. Ford's success in demonstrating progress in the European turnaround plan announced last week remains a key facet of a future upgrade to investment grade. Still, it is clear that Ford's North American operations have been able to significantly offset very weak conditions in Europe, and we expect North America to generate most of Ford's profits and cash flow in 2012 and 2013. We do not expect to raise the corporate credit rating on Ford to investment grade before late 2013 at the earliest. The most important factor in an upgrade to investment grade would be Ford's ability to improve the balance of profitability across regions--particularly Europe, but also in Latin America. Accordingly, we would likely want to have a good understanding of 2014 prospects for profitability by region. For more information, please see "Bulletin: Ford Motor Co.'s European Restructure Announcement Broadly Consistent With Rating And Outlook," published Oct. 25, 2012, and "Research Update: Ford Outlook Revised To Positive, More Diverse Profitability Needed For An Upgrade; 'BB+' Rating Affirmed," published Aug. 10, 2012, both on RatingsDirect.
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