Tuesday December 13, 2005

GM bankruptcy possible: S&P

news.yahoo.com :

A bankruptcy by General Motors Corp. is not "far-fetched" if present trends at the company persist, Standard & Poor's said, shortly after cutting world's largest automaker's ratings deeper into junk territory. S&P cut GM's corporate credit rating by two notches to "B," five steps below investment grade, from "BB-minus." The outlook is negative, meaning the rating is likely to be lowered again over the next two years.

GM has lost nearly $4 billion this year as it battles high health care and commodity costs, eroding U.S. market share and slumping sales of its once-profitable sport utility vehicles. Consolidated debt outstanding was $285 billion on September 30, S&P said.

"This year has witnessed a stunning collapse of GM's financial performance compared with 2004 and initial expectations for 2005," S&P said in its rating statement. An industrywide falloff in demand for sport utility vehicles makes it doubtful that GM's new models can help restore its North American operations to profitability, S&P added.

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(2005-12-13 14:22:56 SGT) [Biz] Permalink

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