Moody's cuts GM's rating deeper into junk (Reuters)

[Up2Late]

(What is it now, "Piece of" Junk?)

Moody's cuts GM's rating deeper into junk

Tue Feb 21, 2006 03:28 PM ET

By Karen Brettell

NEW YORK (Reuters) - Moody's Investors Service on Tuesday cut its debt rating on General Motors Corp. (GM.N: Quote, Profile, Research) deeper into junk territory, saying it is increasingly concerned that high wage and benefit costs are making it difficult for the automaker to compete outside of bankruptcy.

GM has said it could be on the hook for as much as $12 billion in contract obligations to its former employees at its key parts supplier Delphi Corp. (DPHIQ.PK: Quote, Profile, Research) , which it spun off in 1999. Delphi is in talks with GM and unions to slash its labor costs. However, GM Chairman and Chief Executive Rick Wagoner said on Friday that a negotiated settlement between the parties was "not guaranteed."

In the absence of material progress in reducing its union-related cost burden through negotiations, GM could resort to bankruptcy as an option to reduce this burden, Moody's said in a statement.

"Delphi alone will put them in an extremely vulnerable position," said Sean Egan, managing director of Egan-Jones Ratings Co., which predicts GM is likely to file for bankruptcy in the next 12 months.

(more at link below)

<http://go.reuters.com/newsArticle.jhtml?type=businessNews&storyID=11289224&src=rss/businessNews>

[ET Awful]

1. Sounds to me like they're just looking for excuses to go union bashing

The REAL reason GM is in trouble is because they focused on putting out too many SUV models that were doomed to fail once gas prices rose, and because their line of cars was severely neglected in the process.

Both of these caused them to lose sales to foreign competitors.

Now they want to blame the mistakes of their corporate decision makers on people who want to earn a decent wage.

Sounds, tastes and smells like BS to me.

[AX10]

3. You are right. GM is not making the cars that the people want/need...

to buy.

[okieinpain]

4. yep, never mind shi*** product. nope it's those damn terrorist lovers

wanting a decent wage.

[tabasco]

2. It's all the greedy workers' fault.

Mismanagement by the top executives has nothing to do with GM's woes.

:sarcasm:

[4dsc]

5. a GREEDY corporate American at work

attacking wages and benefits are they?? I guess soon, wages and benefits will be for the wealthy only.