Fitch Ratings is the world’s bankruptcy alert agency. If you want to know whether someone (say a large company or small country) will be able to pay his/its bills, talk to Fitch. Currently, Fitch doesn’t think it a good idea to extend credit to anyone in the automotive industry. Fitch Ratings [sub] describes the global outlook for the automotive industry in 2009 as negative. “Weak GDP growth and the effects of the international financial crisis will continue to have a significant impact on the global auto industry, creating downwards pressure on carmakers’ credit profiles in the short to medium term,” says Emmanuel Bulle, Senior Director in Fitch’s Automotive team. “In addition, the length and severity of the current crisis are still unknown, whilst manufacturers’ responses to the crisis are still evolving.” Translation: Nobody knows how long this will be going on, and nobody knows what they are doing. Time for triage . . .
In the “chances for recovery” corner, Fitch expects Japanese manufacturers to remain the highest-rated manufacturers.
In the “park the gurney over there” department, Chrysler, GM and Ford remain on a negative trend, all rated ‘CCC’ or lower.
In between, in the ‘BB’/’BBB’ rating categories, ratings pressure on European and South Korean groups increased in 2008. Fitch believes this is unlikely to abate in 2009. Not dead yet, but some fatalities are to be expected.
OK.
While I may not disagree with the relative prognosis, I have to say that taking the word of Fitch, Moody’s, or S&P, on anything related to credit worthiness seems an exercise in foolishness. All three of them provided ample proof of this by handing out AAA ratings to trillions of dollars of grade A garbage.
I think the ratings agencies need to be near the top of the financial system problems the new administration needs to clean up.
Well said, ttilly. At least, when looking at ANYTHING these suits say, a lot more than due diligence needs to be considered. You hit the nail on the head; not all of the people in these organizations are guilty of covering up lies, but a sufficient number of them ARE, which taints the entire pool of these organizations as far as I’m concerned, too.
Perhaps it would be best for them to be closed down forcibly and have new organizations established – NOT hiring any of these folks from the old companies, but starting out fresh.
Perhaps (I’m just surmising here) the stock markets of the world could be arm-twisted to “voluntarily” chip in 0.05% of their profits to a fund to run independent companies under the watchful eye of a multi-government auditing organization so this kind of crap can’t happen again. Multi-government (with rotating auditing teams from various areas of the world) to make an honest attempt to minimizing the Political wranglings and b-s inherent with handling money and those who do.
It’s just a thought.