Bulletin: Ford Motor Co.'s Earnings And Free Cash Flow Will Be Weaker-Than-Expected In 2021 As Its Operational Headwinds Intensify

NEW YORK (S&P Global Ratings) April 29, 2021--S&P Global Ratings today said that Ford Motor Co.'s (BB+/Negative/B) 2021 earnings and cash flow will be weaker than we previously expected. This is because of severe production shortfalls due to the ongoing semiconductor shortage and the large increases in the prices of aluminum, steel, and precious metals. We now expect Ford's EBITDA margins to fall well below our downside trigger of 5% (compared with our prior base-case assumption of about 5%) in 2021 before recovering toward 6% in 2022. Therefore, it is unlikely that we will revise our outlook on the company to stable until those risks abate, which we anticipate could occur by the end of 2021. Additionally, before revising our

...April 29, 2021 NEW YORK (S&P Global Ratings) April 29, 2021--S&P Global Ratings today said that Ford Motor Co.'s (##+/Negative/B) 2021 earnings and cash flow will be weaker than we previously expected. This is because of severe production shortfalls due to the ongoing semiconductor shortage and the large increases in the prices of aluminum, steel, and precious metals. We now expect Ford's EBITDA margins to fall well below our downside trigger of 5% (compared with our prior base-case assumption of about 5%) in 2021 before recovering toward 6% in 2022. Therefore, it is unlikely that we will revise our outlook on the company to stable until those risks abate, which we anticipate could occur by the end of 2021. Additionally, before revising our outlook we would need to be more confident that Ford's ongoing cost-reduction programs, favorable product pricing, and working capital improvements (leaner inventories) will support free operating cash flow (FOCF) to debt of above 10% (downside trigger)...

Bulletin