Analysts Downgrade Ford

UBS Warburg has downgraded Ford stocks from a “Hold” rating to “Reduce”, citing cash outflows “for years to come” due to a mixture of “non-competitive operations and weakness in the pension fund”. The analysts estimate that Ford will contribute $5-7 billion to the pension fund up to 2007, although they stress that, with cash reserves of 23 billion, there is no question of insolvency. The downgrading is in response to the belief that Ford requires a more stringent restructuring plan if it is to prosper, and the chances of such a plan being implemented are very small.