UBS cuts Ford to 'reduce' from 'hold'

NEW YORK, Sept 3 Reuters reported UBS Securities said it cut its investment rating Tuesday on Ford Motor Co.<F.N> to "reduce" from "hold" and cut its price target to $9.50 from $12 a share.

Analyst Saul Rubin, in a research note, cited a "potent" mixture of noncompetitive operations and weakness in Ford's pension fund that will cause cash outflows for years to come.

"While solvency is not an issue (strong gross cash of $23 billion), we nonetheless see further, perhaps prolonged, weakness before recovery," he wrote. "With a GM 'one-two-punch' product-and-price offensive, on top of ever-present competitive pressure from non-U.S. brands, market share losses are likely to persist in coming years."

Rubin predicted Ford will eventually need a more far-reaching restructuring and greater layoffs, a prospect he thinks remains slim, before it gets back on the path to recovery.

Ford shares closed Friday at $11.77, near the 52-week low of $10.65.