Standard & Poor's announced Monday that it has cut General Motors' corporate credit rating sharply to "B," five steps below investment grade. Amplifying its warning to investors and creditors, the credit rating firm said its outlook for GM is "negative," which means the rating is likely to be lowered again.
GM's outstanding debt was $285 billion at the end of September. In S&P's press release, credit analyst Robert Schulz is quoted as saying "The downgrade reflects our increased skepticism about GM's ability to turn around the performance of its North American automotive operations." Calling the company's financial performance this year "a stunning collapse" from 2004, S&P suggests this year's net losses in GM's North American unit could reach $5 billion - before adding in restructuring costs.

The full S&P analysts report can be viewed here. Read Reuters' commentary here.

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