Ford saw its credit rating cut by Moody’s down to junk because of concerns about its turnaround plan.

Moody’s Investors Service has cut Ford Motor Co.’s credit rating to junk for the first time since the depths of the recession a decade ago on doubts about the automaker’s turnaround plans.

Moody’s downgraded Ford to the highest junk rating, Ba1, saying the automaker’s cash flow and profit margins are below expectations and likely to remain weak during the next two years. The company was hit with a rating’s cut last September.

The cut to junk status affects one of the largest corporate bond issuers in the U.S. outside the financial sector and will make Ford’s borrowing costs. The cut will also put more downward pressure on Ford’s shares since certain pension and index funds will be required to sell of Ford shares.

(Ford Smacked with Ratings Cut by Moody’s)

Investors have traded Ford’s debt for roughly 12 months at levels that implied the company was headed for junk. Hackett has struggled to win over Wall Street with a turnaround plan that include cutting jobs and dropping passenger cars, renewing the company’s lineup of SUVs, Bloomberg said.

“The Ba1 ratings reflect the considerable operating and market challenges facing Ford, and the weak earnings and cash generation likely as the company pursues a lengthy and costly restructuring plan. The restructuring is expected to extend for several years with $11 billion in charges, and a cash cost of approximately $7 billion,” noted Moody’s report.

“Ford is undertaking this restructuring from a weak position as measures of cash flow and profit margins are below our expectations, and below the performance of investment-grade rated auto peers.

Ford CEO Jim Hackett is implementing his plan to improve the Dearborn, Michigan-based automaker’s profitability.

(Ford Q2 Profits Drop 86% Due to $1.2B in Special Charges)

“Moreover, these measures are likely to remain weak through the 2020/2021 period including a lengthy period of negative cash flow from the restructuring programs.” Moody’s said.

Ford also has been hit with a series of external shocks, including a slowdown in China’s vehicle market, Brexit and an incipient recession that is developing across Europe. In addition, sales in North America are slowing down while the company’s decision to exit the passenger-car market has reduced its market share.

Nonetheless, some analysts see promise.

“Despite seeming being late to the autonomous vehicle game, Ford recently leapfrogged back into the conversions with Volkswagen partnership,” according to a note from Stone Fox Capital.

(Ford’s Alliance with VW a Potential Problem in Talks with UAW)

“The auto manufacturer isn’t in the dire position thought by most making the dividend save for now. The biggest question remains whether Ford can turn in the consistent cash flows to make the stock a rewarding buy below $10,” Stone Fox noted.

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