NEW YORK—Standard & Poor's said Thursday it expects to raise Ford Motor Co.'s corporate credit rating once the company's labor negotiations end, as long as its new contract is competitive.
S&P put Ford's "BB-" credit rating on credit watch with positive implications. The agency said it expects to raise that to "BB+" -- which is one notch below investment grade -- and assign a "Stable" outlook once Ford's new contract is ratified. S&P said it will only take that action if the contract lets Ford "remain solidly profitable in North America" and doesn't place the company at a disadvantage relative to General Motors Co., where workers ratified a new contract this week.
S&P upgraded GM's corporate rating from "BB-" to "BB+" earlier Thursday and assigned a "Stable" outlook.
Ford and the United Auto Workers are still negotiating a new contract. They are using the GM contract as a template, but they could make changes. The GM contract gives most workers profit-sharing checks in lieu of annual raises. It also gives workers a $5,000 signing bonus.
Standard & Poor's said Ford has a two-year track record of profits and cash flow generation in its automotive operations, and that should continue with the market recovery in North America.
Ford shares rose 7 cents to close at $10.