Ford gets its mojo back

Credit upgrade sees assets, logo returned as company turns a profit

2004 Ford F-150. Photo / Supplied
2004 Ford F-150. Photo / Supplied

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 recovery 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.

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 had unlocked $2.35 billion ($3.12 billion) in new loans at what was almost the last minute before credit markets froze and the United States 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 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, said chairman Bill Ford.

"This is one of the best days that I can remember," he said.

"This is enormously emotional for me personally and for my family."

Bill Ford is the great-grandson of Henry Ford, who founded the company and approved the logo's first versions.

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 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.

- Independent

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