Amend: Fitch Affirms Ford, Ford Credit IDRs at 'B'; Outlook Negative.

CHICAGO -- This is a correction for a message issued on Feb. 13, 2008. It amends the rating list for Ford Credit Australia Ltd.

Fitch Ratings has affirmed the Issuer Default Ratings (IDRs) of Ford Motor Company and Ford Motor Credit Company at 'B', and maintained the Rating Outlook at Negative. Ford continues to make steady progress on its restructuring actions, but continued weakness in the North American auto market, combined with industry cost, pricing and supplier pressures continue to limit the impact of structural cost improvements on the bottom line. International operations have shown steady improvement, benefiting the company's consolidated credit profile. Liquidity remains healthy, and sufficient to weather a significant downturn in 2008 U.S. industry sales, but will decline through at least 2008. Cash outflows in 2008 will be material as a result of operating losses in North America, restructuring costs, and higher net interest expense. The funding of the UAW VEBA will also impact liquidity in 2008, although the benefits from healthcare savings will not be realized until 2010. The Negative Rating Outlook is expected to remain in place until a firmer path to positive free cash flow is established.

Fitch has affirmed the following ratings with a Negative Rating Outlook:

Ford Motor Co.

--Long-term IDR at 'B';

--Senior secured credit facility at 'BB/RR1';

--Senior secured term loan at 'BB/RR1';

--Senior unsecured at 'B-/RR5'.

Ford Motor Credit Co.

--Long-term IDR at 'B';

--Short-term IDR at 'B';

--Senior unsecured at 'BB-/RR2';

--Commercial paper at 'B'.

A full list of all affected ratings is included at the end of this release.

In North America, revenues will remain under pressure, particularly in the first half, due to economic conditions, the impact of the housing market on pickup sales, projected lower fleet sales and the trend to lower-priced, fuel-efficient vehicles. The new UAW contract has provided the OEMs with greater flexibility to cut production and manage inventories in response to weaker market demand - a factor that will also result in increased production cyclicality going forward.

Ford has made material improvement in its cost structure, although higher product and commodity costs have limited the impact on the bottom line. Ford's earlier buyout program extended through the third quarter of 2007, indicating that the full realization of these cost savings will continue to flow through reported results over the next several quarters. Together with Ford's new buyout program (for all North American UAW workers) that is weighted to the first quarter of 2008 and the gradual growth in Tier-2 wage employees, Ford is positioned to show demonstrable fixed cost savings through 2008. Although commodity costs are not expected to wane, the rate of growth should slow substantially, allowing structural cost savings to become more evident. Continued improvement in material, engineering and other product costs should augment margin improvement projected from labor savings. North American hourly workers could be reduced by more than 40% over the period from yearend 2005-2009, with incremental wage and benefit savings realized from the implementation of Tier-2 wages. The reduction in personnel at the former Visteon assets, the outsourcing of certain non-production functions and the conversion of several plants to 100% Tier 2 wage levels will also benefit Ford's cost structure. Tier 2 wage levels incorporate meaningful reductions in long-term benefit accruals through the lack of retiree health care and enrollment in defined contribution pension plans.

Ford also faces the expiration of the Canadian Auto Workers contract in September 2008. Given the terms of the recent UAW agreement, the Detroit Three will certainly be targeting additional wage, benefit and other cost-saving opportunities in Canada. The Detroit Three may be seeking different goals under a new contract, and talks may not be as smooth as the recent UAW talks

Ford showed healthy revenue growth in the third and fourth quarters of 2007, aided by easy comparisons with 2006 and support from a number of vehicle models (Fusion, Edge and Escape). Ford's focus on managing production and inventory levels has benefited results through progress on pricing and residual values. Overall results were severely impacted by a 13% reduction in high-margin pickup sales.

Although Ford has shown decent balance across segments, the company's product portfolio remains misaligned with market trends that favor smaller, more fuel-efficient vehicles. The transition to a more market-weighted product portfolio, along with the efficiencies of fewer platforms and higher number of products per platform, will not be achieved through 2010. Although Ford's cost reduction programs are in line with expectations, achievement of viable long-term operating margins will require market share stability and eventual growth in revenues. Achievement of these margin levels is not expected through 2010. Ford has also made clear strides in quality, which should benefit the company's market acceptance and pricing if the trend is maintained. The company's Sync dashboard technology (developed with Microsoft), has also benefited the company in terms of progressive technology.

Ford's international operations continue to show healthy improvement. European operations have shown modest share gains, improved pricing and growing profitability, resulting from structural cost improvements and well-received product introductions. Latin America has shown very strong profitability, which is expected to continue although perhaps not at the heights achieved in 2007. Further growth is also expected in developing markets including China and Russia. In total, Ford's international operations have transitioned from a key risk factor several years ago into a moderate positive for the company's credit position.

While FMCC has been profitable, Fitch believes that operating performance will remain under pressure due to lower contract volume and asset quality deterioration which is affecting all auto lenders. Slower portfolio growth will tend to inflate credit metrics further. Fitch also believes that FMCC access to liquidity via the securitization markets will come at a higher cost as the continual credit market dislocation widens.

A downgrade could result if Ford experiences:

-A material problem with the launch of the new F-150.

-A decline in U.S. industry sales below 14.5 million units (light vehicle sales) combined with lack of projected fixed cost reductions that result in a material deferral of the anticipated timeline to positive free cash flow.

-Ford Credit experiences restricted access to the securitization market.

-A significant decline in the U.S. market combined with a reversal of operating profits across Ford's international operations.

A return to a Stable Rating Outlook would be anticipated in the event that a clear path to positive free cash flow is established. This scenario would include continued stability in the company's retail market share, a solid F-150 launch, realization of expected fixed cost reductions in North America, stability or continued growth in the company's international operations and maintenance of healthy liquidity. A projected return to positive cash flow will likely require stabilization of the housing market, due to the impact of pickup sales on Ford's operating results.

Ford will continue to face increased cost and potential supply disruptions from its stressed supply chains. Although most Tier-1 suppliers have ample liquidity during 2008 due to timely accessing of the leveraged loan market, lower-tier suppliers are more exposed to projected production declines at the Detroit Three, pricing and commodity cost pressures, and lack of access to capital. The higher risk of production disruptions or supplier liquidations will cause the OEM's and Tier-1 suppliers to incur additional costs in order to address particular situations.

Ford's liquidity has been boosted by substantial debt issuance over the past eighteen months. Total automotive debt, including $6.3 billion of new debt associated with the UAW VEBA agreement, is approximately $33 billion (following a $2.6 billion reduction in debt through two equity-for-debt transactions). Total debt is now roughly $20 billion more than at yearend 2002. Net interest expense, augmented by the expected decline in cash holdings and the associated decline in interest income, will continue to represent a more material claim on consolidated cash flows than in the past. Fitch expects that even in a relatively harsh downturn in 2008, liquidity would remain well above the level needed to finance Ford's operations and its restructuring requirements.

Ford has a light maturity schedule over the next three years, and is unlikely to require external capital, although Ford may seek opportunities to further boost liquidity if the markets become receptive. The company may also continue to seek opportunities to exchange equity for debt. The company retains access to $11.5 billion in credit lines, which contain no financial tests. Access is subject to a borrowing base, which would be expected to reduce availability in the event of further deterioration in operating results. Recovery ratings remain in the same range, as a decrease in healthcare liabilities has been offset by an increase in debt. Fixed cost reductions that were anticipated to be realized in a bankruptcy scenario have been partially achieved through the new UAW contract. Recoveries from international operations have also increased.

Fitch has affirmed the following ratings with a Negative Rating Outlook:

Ford Motor Co.

--Long-term IDR at 'B';

--Senior secured credit facility at 'BB/RR1';

--Senior secured term loan at 'BB/RR1';

--Senior unsecured at 'B-/RR5'.

Ford Motor Co. Capital Trust II

--Trust preferred stock at 'CCC+/RR6'.

Ford Holdings, Inc.

--Long-term IDR at 'B';

--Senior unsecured at 'B-/RR5'.

Ford Motor Co. of Australia

--Long-term IDR at 'B';

--Senior unsecured at 'B-/RR5'.

Ford Motor Credit Co.

--Long-term IDR at 'B';

--Short-term IDR at 'B';

--Senior unsecured at 'BB-/RR2';

--Commercial paper at 'B'.

FCE Bank Plc

--Long-term IDR at 'B';

--Senior unsecured at 'BB-/RR2';

--Short-term IDR at 'B';

--Commercial paper at 'B';

--Short-term deposits at 'B'.

Ford Capital B.V.

--Long-term IDR at 'B';

--Senior unsecured at 'BB-/RR2'.

Ford Credit Canada Ltd.

--Long-term IDR at 'B'.

--Short-term IDR at 'B';

--Commercial paper at 'B';

--Senior unsecured at 'BB-/RR2'.

Ford Credit Australia Ltd.

--Long-term IDR at 'B';

--Short-term IDR at 'B';

--Commercial paper at 'B'.

PRIMUS Financial Services (Japan)

--Long-term IDR at 'B';

--Short-term IDR at 'B'.

Ford Credit de Mexico, S.A. de C.V.

--Long-term IDR at 'B';

--Senior unsecured at 'BBB+'.

Ford Credit Co S.A. de CV

--Long-term IDR at 'B'.

--Senior unsecured at 'BB-/RR2'.

Ford Motor Credit Co. of New Zealand 

--Long-term IDR at 'B';

--Senior unsecured at 'BB-/RR2';

--Short-term IDR at 'B';

--Commercial paper at 'B'.

Ford Motor Credit Co. of Puerto Rico, Inc.

--Short-term IDR at 'B'.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.