Bulletin: Ford Motor Co.'s Profits And Cash Flows Approach Downgrade Threshold As Tariff Risks Offset Cost Improvements

This report does not constitute a rating action. NEW YORK (S&P Global Ratings) May 6, 2025--S&P Global Ratings today said that tariff-related costs (including a gross impact of $2.5 billion for 2025) imply narrowed ratings headroom for Ford Motor Co. (BBB-/Negative/A-3) relative to our prior assumptions for 2026 and beyond, despite its better cost management in the first quarter ended March 31, 2025. After incorporating these cost headwinds, net of offset and recovery actions (roughly $1 billion in 2025), we now expect the company?s EBITDA margins will be in the 6%-8% range for 2025 to 2027 (compared with our prior expectation for the 6.5%-8.5% range) with free operating cash flow (FOCF) to sales of about 0.5%-1.5%, which is slightly below

...May 6, 2025 This report does not constitute a rating action. NEW YORK (S&P Global Ratings) May 6, 2025--S&P Global Ratings today said that tariff-related costs (including a gross impact of $2.5 billion for 2025) imply narrowed ratings headroom for Ford Motor Co. (###-/Negative/A-3) relative to our prior assumptions for 2026 and beyond, despite its better cost management in the first quarter ended March 31, 2025. After incorporating these cost headwinds, net of offset and recovery actions (roughly $1 billion in 2025), we now expect the company's EBITDA margins will be in the 6%-8% range for 2025 to 2027 (compared with our prior expectation for the 6.5%-8.5% range) with free operating cash flow (FOCF) to sales of about 0.5%-1.5%, which is slightly below the median level among automakers we rate in the '##+', '###-', and '###' categories. Our ratings focus will remain on Ford's pace and ability to deliver on its cost-reduction goals, along with pricing and other actions, to mitigate higher...

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