Ford and General Motors' new union contracts may qualify them for higher credit ratings.
Geoff Robins
Ford announced today that it is cutting production by 21% resulting in downtime at the assembly plant in St. Thomas Ontario on Friday Aug. 18, 2006. Ford Motor Co. announces sharp cuts in its North American production that would force it to partially shut down plants in the U.S. and Canada in the fourth quarter. (AP Photo/Canadian Press, Geoff Robins)
Moody's Investors Service said Wednesday it's reviewing its ratings for Ford .
The Dearborn, Mich., auto maker reached a deal on Tuesday with the United Auto Workers for a new four-year contract.
The automaker's ratings under review include "Ba2" for corporate family and probability of default, and "Ba3" for senior unsecured debt, both of which are so-called junk status.
They also include "Baa3" for secured bank debt, the lowest level of investment grade.
An upgrade would return Ford more squarely to investment-grade status, which the automaker has said is one of its top goals.
About $55 billion of debt would be affected.
Moody's is already reviewing Detroit-based General Motor's ratings after its workers ratified a similar contract last week.
