S&P cuts GM, Ford, Chrysler ratings lower into junk
Thu Jul 31, 2008 1:27pm EDT
reuters.com
NEW YORK (Reuters) - Standard & Poor's on Thursday cut ratings on all three major U.S. automakers deeper into junk status, citing expected losses due to higher gas prices and a weakening U.S. economy.
S&P cut its ratings for General Motors Corp (GM.N: Quote, Profile, Research, Stock Buzz), Ford Motor Co (F.N: Quote, Profile, Research, Stock Buzz) and Chrysler Automotive LLC to "B-minus," or six levels below investment grade, from "B." It also cut to "B-minus" from "B" the finance arms of Ford, Chrysler and GMAC, which is 49 percent owned by GM.
For Ford, S&P cited mounting cash losses due to lower U.S. sales and a shift in demand from large pickup trucks and sport utility vehicles amid higher gas prices and the weak economy.
Automakers are struggling to survive by shifting vehicle designs to fuel-efficient cars from once-profitable SUV lines.
S&P estimated Ford will burn as much as $12 billion to $13 billion from its global automotive operations this year.
GM this month announced a restructuring plan to cut costs by $10 billion and sell up to $4 billion in assets in a bid to shore up cash.
(Reporting by Walden Siew; Editing by James Dalgleish)
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