Ford Motor Co.

Overview Key strengths Key risks Solid competitive position in profitable truck segments in North America and Europe. Higher pricing pressure and labor costs may offset the company?s fixed-cost reduction. Low S&P Global Ratings-adjusted leverage (debt to EBITDA under 1x as of Sept. 30, 2024, and a strong free operating cash flow generation of over 2.5% of sales. Skepticism around ability to lower ongoing warranty-related costs and better manage supply chain. Strong liquidity including automotive cash balances of over $27.9 billion and total available liquidity of about $46.1 billion as of Sept. 30, 2024. Increasing competition and potential for cost overruns on electric vehicles (EVs). Consistent credit performance and prudent risk management at captive finance operations. The automaker?s earnings through the

...We expect Ford Motor Co.'s margin expansion to be limited in 2024 and 2025 owing to high labor costs and increasing pricing pressure. The automaker's earnings through the third quarter of 2024 indicate a slower-than-expected progress on cost reduction, which was unable to offset the rising pricing pressure. This is evident by the sequential dip in EBIT margin, specifically in Ford Blue segment driven by supplier issues. With potentially continued pricing headwinds across segments and slower reduction of losses in its Model E (electric vehicle) business, we now expect EBITDA margin through 2025 to remain under pressure. These risks...

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