...May 1, 2026 This report does not constitute a rating action. Ford's 2026 guidance was modestly weaker than our expectations, due to higher commodity costs. Ford's first-quarter (ended March 31, 2026) results indicated that cost reductions were more than offset by increased expenses from the ongoing disruption at the Novelis plant and higher-cost aluminum procurement. Based on the company's updated guidance, higher commodity prices will offset much of the one- time benefit of $1.3 billion recoveries of IEEPA tariffs paid from March 2025 ¡ February 2026. Ford's results also demonstrated resilience in volumes with strong product mix at favorable prices. As a result, we expect some profit recovery for the remainder of 2026 as the company executes on optimizing mix, price, and cost reduction to offset an estimated additional $1 billion commodity headwind. To manage ongoing industry headwinds, the company's targeted material and warranty cost reduction is a critical ratings driver. Our baseline...
