Ford Rises with Its Credit Rating

Ford Motor Corp. has been on a roll lately, but the automaker may end up suffering from too much of a good thing as negotiations with the United Auto Workers (UAW) loom on the horizon, Forbes reported.

Ford Motor shares rallied Monday after Standard & Poor's upgraded the automaker's debt rating, as well as that of its finance arm. The rating agency also said there's a one in three chance the automaker's rating could get hiked again within the next year.

S&P increased Ford's corporate credit rating to B-plus, from B-minus, and its issue-level rating on Ford's senior secured debt to BB, from B-minus. It also raised the issue-level rating on Ford's unsecured debt to B from CCC and revised its recovery rating on the debt.

In addition to the upgrade, Ford's stock was fueled by encouraging economic news as the Institute for Supply Management's manufacturing index came in ahead of expectations at 55.5 in July, even though the figure was slightly below June's 56.2 reading. The figure has held above 50, the level which marks the tipping point between expansion and contraction, for the past year.

By Monday afternoon Ford's stock was up 3.2 percent, or 40 cents, to $13.18. Fellow automaker Toyota Motor increased 2.5 percent and Honda Motor 3.4 percent.

Things have been going well for Ford, which has been reporting market share gains and the glow from its recently announced second-quarter results. The automaker could up suffering from too much of a good thing, though, as its rebound, at a time when Detroit's other automakers are still regaining their footing after emerging from bankruptcy, could lead to stiffer demands from the UAW.