Ford Gets Rid of the Junk in its Trunk

Walmart has just been reminded about the tight connection between investor sentiment and brand reputation. Now Ford hopes to see the same effect — in reverse.

Ford got the happy news this week that Fitch raised its credit rating to "investment" grade, becoming the first debt-rating firm to return the automaker from the junk-debt status it had suffered for seven yeras.

Among the immediate benefits, investors rapidly bid up Ford bonds. This will allow Ford to borrow money less expensively.

And perhaps most important, the re-emergence of Ford debt from junk status reaffirms the lonely strategy forged by CEO Alan Mulally — alone among leaders of the Detroit Three automakers — in refraining from accepting a U.S.-government bailout after the onset of the Great Recession.Continue reading...