Fitch: General Motors on watch

Fitch Ratings said that following the decision of the United Auto Workers union to go out on strike against General Motors Corp., it has placed the issuer default ratings and securities ratings of the following companies on rating watch negative:

• GM's issuer default rating at B, senior secured BB/RR1 and senior unsecured B-/RR5;

• American Axle & Manufacturing, Inc.'s issuer default rating BB, senior unsecured bank facility BB and senior unsecured BB and American Axle Manufacturing Holdings Inc.'s issuer default rating BB;

• ArvinMeritor Inc.'s issuer default rating BB, senior secured BB+ and senior unsecured BB-;

• Tenneco, Inc.'s issuer default rating BB-, senior secured bank facility BB+, senior secured notes BB and subordinated B.

• Hayes-Lemmerz International, Inc.'s issuer default rating B and Hayes Lemmerz Finance - Luxembourg SA's issuer default rating B, senior secured BB/RR1 and senior unsecured B-/RR5; and

• HLI Operating Co., Inc.'s issuer default rating B.

Fitch said that the UAW strike has the potential for far-reaching, crippling repercussions throughout the industry.

Although the strike is expected to be short-lived, due to the potentially devastating consequences to both sides, the onset of a strike could limit the ability of both parties to control the subsequent chain of events, the agency noted.

Fitch added that negative cash flow at GM will accelerate, due to operating losses and working capital reductions.

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