Fitch upgrades General Motors to BBB

Fitch Ratings said it upgraded the long-term issuer default ratings for General Motors Co. (GM) and its finance subsidiary General Motors Financial Co., Inc. (GMF) to BBB from BBB- with a stable outlook.

Fitch said the upgrade of GM's ratings is supported by fundamental improvement in the company's credit profile largely resulting from its work to improve product profitability while maintaining a relatively conservative balance sheet.

The agency expects the margin performance of GM's key North American operations to remain strong relative to its peers, while its aggressive efforts to restructure its global operations will drive further improvements in profitability and cash flow outside the U.S. Fitch expects the company to maintain a relatively strong liquidity position sufficient to protect against a downturn while keeping leverage near the low end of its peers.

Concerns stemming from the ignition switch recall have largely abated, and Fitch said it expects any remaining recall-related cash costs to be manageable.

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