Ratings agency cuts Ford to junk status

The Ford Motor Company has been dealt a blow by credit rating agency Moody’s Investors Service, which has cut the carmaker’s credit rating to junk on doubts that a turnaround plan by chief executive Jim Hackett will generate earnings and cash quickly enough.

Moody’s downgraded Ford to the highest junk rating, Ba1, saying the carmaker’s cash flow and profit margins are below expectations and likely to remain weak over the next two years. The descent to junk status affects one of the largest corporate bond issuers in the US outside the financial sector.