DETROIT, Oct 25 (Reuters) - Ford Motor Co. Chief Financial Officer Allan Gilmour said on Friday that a credit rating downgrade by Standard & Poor's "does not reflect the fundamental strength of our business."
S&P cut its long-term credit ratings for Ford and its finance arm on Friday to two notches above "junk" status, saying it was concerned about the pace of the No. 2 U.S. automaker's restructuring.
In a statement, Gilmour said the restructuring plan aimed at producing $7 billion in annual pretax profits by mid-decade was on track. He said the company's earnings were running ahead of expectations, and it had sped up cost-cutting efforts.
While S&P said Ford's pension liabilities were a concern, Gilmour said the liabilities were "manageable." Ford said earlier this month that its plans were underfunded by about $6.5 billion at the end of the third quarter, but that it was not expecting any mandatory contributions before 2006.
Ford had $162 billion of debt as of Sept. 30, S&P said. Downgrades often boost borrowing costs, which are key for Ford and other automakers' incentive programs. Many industry analysts had expected the downgrade.