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Ford’s Rating Inches Toward Junk at S&P on ‘Subpar’ Performance

Keith Naughton

(Bloomberg) -- Ford Motor Co. sustained its second cut in as many months by a major credit-ratings company concerned that the major restructuring the automaker embarked on last year is moving too slowly.

S&P Global Ratings lowered its grade on Ford to BBB-, one step removed from junk, and assigned a stable outlook. It called the carmaker’s performance in China and Europe “subpar” and said Chief Executive Officer Jim Hackett faces “high execution risks” in his efforts to turn the company around.

Hackett, 64, is leading the company through an $11 billion global restructuring that the company has said will take years. Profit margins shrank in North America during the third quarter, due in part to plunging sales of one of its cash cows, the Explorer sport utility vehicle, following a bungled launch. The CEO is aiming to reverse Ford’s fortunes by cutting thousands of jobs, refreshing an aging SUV lineup and ditching sedans.

To contact the reporter on this story: Keith Naughton in Southfield, Michigan at knaughton3@bloomberg.net

To contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, Dan Wilchins

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