NEW YORK -- Standard & Poor's said on Monday, Oct. 3, that it may lower its credit ratings on General Motors and Ford Motor Co., citing increased concerns about the ability of both companies to turn around their North American operations.
The automakers are challenged by a deteriorating product mix, sales volume and pricing pressures, S&P said in separate statements. The credit rating agency is also concerned about GM's exposure to its supplier and former affiliate, Delphi Corp.
S&P cut GM and Ford below investment grade on May 5.
Separately, S&P raised its corporate credit rating on Visteon Corp., a former subsidiary of Ford, two notches to "B-plus." The ratings company cited Visteon's transfer of several unprofitable plants and businesses to an entity managed by its former parent.
S&P rates GM's long-term debt "BB," the second highest junk rating and its short-term debt "B-1." The ratings agency ranks Ford long term debt is ranked "BB plus," one level below investment grade, and the its short-term debt "B-1."
A ratings downgrade can increase a company's borrowing costs.