To weather the recession without a government bailout, Ford mortgaged many of its assets, including its logo, for cash
Moody’s Investors Service yesterday raised Ford’s debt rating to investment-grade for the first time in 7 years, meaning that all of FoMoCo’s U.S. assets, including factories, logos and trademarks for its models are back in the company’s hands.
“The Ford Blue Oval is back where it belongs with the Ford family of 166,000 employees around the world,” said Bill Ford, executive chairman, Ford Motor Company. “This is a great day for us and is the result of several years of hard work and progress by everyone associated with Ford. When we pledged the Ford Blue Oval as part of the loan package, we were not just pledging an asset. We pledged our heritage. The Ford Blue Oval is one of the most recognized symbols in the world, and it is a source of great pride and passion, both inside and outside our company. Getting the Ford Blue Oval back feels amazing, and it is one of the best days that I can remember.”
Some background on how Ford covered its debt during the 7-year period:
- December 2006: Raised $23.5 billion in liquidity, consisting of $18.5 billion of senior secured debt and credit facilities, secured by substantially all of our domestic assets, including the Ford Blue Oval, F-150 and Mustang trademarks, and $5 billion of unsecured convertible debt.
- November 2007: Together with the UAW, Ford negotiated a transformational labor agreement, with a lower wage structure for new employees and flexible work rules
- March 2009: Reached ground breaking UAW agreement that helped the company achieve parity with transplant automakers, resulting in incremental annual savings and efficiencies
- October 2009: Reported first quarterly pre-tax operating profit since Q1 2008
- Year-end 2009: Achieved a full-year operating profit and net income of $2.7 billion – an improvement of $17.5 billion from the losses of 2008
- Year-end 2011: Reported third year in a row of improved annual operating profits and reduced debt by more than $20 billion compared with year-end 2009
- September 2011: Completely paid back the loan
- March 2012: First dividend payment in almost six years
– By: Omar Rana