New York, NY, United States (4E) – Standard & Poor’s Ratings Services revised General Motors Co. ‘s outlook to positive from stable, and also upgraded Ford Motor Co.’s rating to investment grade as Detroit automakers generate profits not seen since the beginning of the century.
The ratings firm also affirmed the corporate credit rating of double-B-plus for GM, one notch below of investment grade. S&P lifted Ford’s rating to triple-B-minus, making them the last major ratings firm to give an investment grade rating to the automaker.
In 2005, the ratings of GM and Ford fell to junk status as part of the decline that led to the government-backed bankruptcy reorganization for GM while Ford avoided bankruptcy. Last year, Fitch Ratings and Moody’s Investors Service upgraded Ford’s rating to investment grade.
S&P said GM’s credit profile could get a boost from its profits in China and North America. The revised outlook revision reflects the potential for further upgrade next year if its car manufacturing operations continue to improve.
The ratings firm also cited Ford’s strong performance in North America and China as well as rising market share in Europe as factors that could support future profitability.
GM said this week that August sales in the U.S. increased 15 percent from a year ago, while Ford sales jumped 12 percent.