DETROIT -- The financial outlook for North American auto suppliers in the second half of 2006 is deteriorating, the ratings agency Standard & Poor's said Friday. The New York agency cited production cuts by General Motors and Ford Motor Co., especially of light trucks.
"Although the numerous business challenges facing auto suppliers have neither intensified nor diminished during the past few months, most suppliers have not been able to overcome these challenges," the report said. "Companies in the sector are increasingly vulnerable to the still-fragile state of the U.S. auto industry."
GM is planning to cut production 8 percent in the third quarter, and S&P said Ford plans to cut production by 3 percent. As of Friday, S&P had negative ratings or outlooks on 23 of the 33 auto suppliers it evaluates. None had a positive outlook.
Only three S&P-rated suppliers carry investment-grade ratings: Magna International Inc., BorgWarner Inc. and Johnson Controls Inc.
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