Since the prospect of a prolonged and widespread strike at
General
Motors, Ford and
Chrysler
has largely been averted, thanks to the agreement reached by
General Motors and the United Auto Workers union, ratings agency
Standard
& Poor’s announced it has placed its long term
corporate credit ratings for the Big Three on CreditWatch with
positive implications.
However, GMAC,
the former captive arm of General Motors in which GM still owns a
49 per cent stake, and its mortgages unit Residential Capital LLC
both remain on CreditWatch with a negative outlook, with ‘BB+’ and
‘BBB-‘ ratings respectively.
Robert Schulz, credit analyst at S&P said in a
statement: “The CreditWatch action reflects today’s announcement
that General Motors and its main union, the United Auto Workers
(UAW), have reached a tentative new labour contract that includes
an agreement designed to address the massive post-retirement
employment benefit obligations associated with GM’s UAW
population.”
S&P said the negative outlook on GMAC reflects its concerns
of ratings pressures from GM and from Residential Capital’s
operating performance.
Furthermore, recent turmoil in the credit markets has added
concerns to the performance of Residential Capital and hence,
GMAC’s ratings.
Meanwhile DaimlerChrysler
Financial Services and Ford
Motor Credit are on CreditWatch with positive
implications.
