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Fitch Ratings downgraded


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to its lowest investment-grade credit rating Wednesday after a disappointing earnings report, but the agency said it does not expect to downgrade the automaker to junk in 2005.

Fitch lowered Ford's debt to BBB- after second-quarter earnings slid 19% on dwindling market share in North America. Shares of Ford were recently down 24 cents, or 2.2%, to $10.60, while its rival,

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, disappointed Wall Street with a loss for the quarter.

Fitch also downgraded Hertz, a Ford subsidiary, to BBB-.

"The downgrade of Ford reflects the deteriorating profitability of Ford's North American operations, most recently affected by new pricing initiatives, higher commodity costs and supplier issues," Fitch said in a statement. "Along with the sharp decline in large and mid-size SUVs during 2005 and cash outflows related to restructuring activities, Fitch expects that cash flow will remain negative through 2005 and potentially into 2006."

This marks the second Fitch downgrade on Ford this year. The agency said it does not anticipate another downgrade because the automaker's "recent product performance and very healthy liquidity" will buy it enough time to improve its cost structure.