Moody's may lift GM

Moody's Investors Service said it is reviewing the Ba2 corporate family rating and Baa3 secured credit facility rating of General Motors Co. for possible upgrade.

The review is based on improvements in operating and financial performance and pending resolution of a new union contract, Moody's said.

The company has reached a tentative agreement with the United Auto Workers (UAW) union for a new four-year contract, the agency said.

A ratification vote is expected within the next 10 days, Moody's said, and if approved the contract would cover about 50,000 UAW employees in the United States.

The company's speculative-grade liquidity is affirmed at SGL-1.

The review will focus on the degree to which the proposed contract will enable General Motors to maintain its current level of operating flexibility, cost competitiveness and low breakeven point in its North American operations, Moody's said.

The review also will consider the company's long-term commitment to maintaining critical operating and financial disciplines that it has embraced since 2009, the agency added.

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