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Ford 'A+' Senior Debt Affirmed by Fitch IBCA on Volvo Car Acquisition

28 January 1999

Ford Motor 'A+' Senior Debt Affirmed by Fitch IBCA on Volvo Car Acquisition - Fitch IBCA -

    NEW YORK, Jan. 28 -- Ford Motor Co.'s (Ford) 'A+' senior debt
rating is affirmed by Fitch IBCA following Ford's agreement to purchase AB
Volvo's worldwide passenger car business for SEK 50 billion (approx.
$6.45 billion).
    The transaction is subject to approval by Volvo's shareholders and
regulatory authorities.
    Volvo's premium products will substantially enhance Ford's position and
growth potential in the more profitable luxury segment of the markets, and
give it a stronger presence in Europe, Japan, and the U.S.  The combination
also offers substantial opportunities for operating synergies and cost
savings in engineering, components, and distribution.
    Ford exited 1998 with $23.8 billion of automotive cash, and will still
have substantial financial flexibility after paying the $6.45 billion cash
purchase price.  Additionally, Ford's free cash generation capacity remains
substantial, given continued cost takeouts and improved capital spending
efficiencies.