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Old 12-22-2008, 12:57 PM   #1
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Default Egan-Jones Ratings: Ford is Toast, Too

Egan-Jones Ratings is a relatively obscure little outfit out of Haverford, PA. It’s one of those companies whose website doesn’t have a flashy design or, for that matter, a phone number (just a contact form). Forbes rates them number 1 on their list of eight financial mavens (not ten!) “who saw the crisis coming.”

“A vocal critic of rivals Moody’s, Fitch, and Standard & Poor’s, Egan has a track record of warning investors about poor credit quality long before the Big Three ratings agencies. Most recently he said to shun subprime-mortgage-backed bonds even while the other agencies said these were investment-grade credits.”

And now Sean has a few words on Ford, via a ginormous Fordetorial in Bloomberg. ““It’s unrealistic of Alan [Mulally] to expect Ford to survive, let alone profit, when they’re experiencing a 30-plus percent decline in sales. Without a bankruptcy filing and a complete reorganization, Ford is not going to be profitable, period.” Egan ain’t kidding. His company rates Ford’s debt a D, its lowest level. And if that’s not enough blowback for Mulally-loving Fordophiles, here’s some more…

“The company may need a bailout to get to 2010, because for all Mulally has accomplished, it’s not enough, says Kevin Tynan, an auto analyst at New York-based Argus Research Corp. Mulally should have produced smaller cars faster and pushed for union concessions to take effect before 2010.
‘He played the cards he was dealt,’

Tynan says. ‘What you needed was someone who would throw back the cards and say, ‘This won’t work.’ You needed General Patton, somebody who is not going to accept this is how things are done. It was essentially a missed opportunity, maybe the last chance.’”
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