Economy Briefs: Google joins ‘cloud’ data-storage trend
Revenue was $39.2 billion, up 59 percent from a year ago. Analysts were expecting $37 billion.
Fitch ups Ford credit to investment grade
DETROIT — The Fitch Ratings agency lifted Ford’s credit rating from junk status to investment grade Tuesday, a sign that the company’s recovery from near collapse is almost complete.
But Ford Motor Co. needs another agency, either Standard & Poor’s or Moody’s, to make the same upgrade before it can get its blue oval logo, factories and other assets out of hock.
Ford lost its investment-grade status in 2005 as it was losing billions of dollars when the SUV and truck boom went bust. The company mortgaged most of its assets to borrow $23.5 billion. That allowed Ford to revamp its cars and trucks and avoid bankruptcy protection. Crosstown rivals General Motors and Chrysler didn’t have enough cash to make it through the 2009 economic downturn and were forced into government-funded bankruptcies.
Investment grade means that debt has a low risk of default, while junk status is considered poor credit quality. Companies with higher credit ratings can charge more for their bonds and generally get lower interest rates on their borrowing.
Fitch raised Ford’s credit to “BBB minus” from “BB plus” Tuesday. The ratings agency said that Ford’s work to repair its balance sheet and improve its array of vehicles in recent years “has put the company in a solid position to withstand the significant cyclical and secular pressures faced by the global auto industry.”
Ford’s cash generation and lower costs will give it the financial flexibility it needs to stay at investment grade in a period of economic stress, Fitch expects.
Wal-Mart creates global compliance officer post
BENTONVILLE — Wal-Mart Stores Inc. is creating a new global compliance officer position after reports that the retailer covered up results of an internal probe proving that its Mexican subsidiary bribed officials there.
The world’s largest retailer said Tuesday that it has been working diligently to address corruption issues as they arise and that it has created a new position that will be responsible for making sure the company is in compliance with the U.S. Foreign Corrupt Practices Act in every market around the world.
The new global leader has yet to be named, but will oversee compliance directors in five other markets.
Wal-Mart also said it has established a dedicated compliance director in Mexico who will report directly to this new global compliance leader.