S&P lowers GM, GMAC

Standard & Poor's said it lowered the corporate credit rating on General Motors Corp. to B- from B and removed ratings from CreditWatch, where they were placed with negative implications on June 20.

The agency said it also lowered the issuer credit rating on GMAC LLC

The outlook is negative.

S&P said the downgrade reflects expanding cash losses in GM's North American automotive operations caused by sharply lower U.S. light-vehicle sales and the recent dramatic shift in demand away from large pickup trucks and sports utility vehicles amid higher gas prices and the weak economy.

Ratings on GM reflect multiple problems the company faces in returning its North American automotive operations to profitability and positive cash generation, the agency said.

GM's response to these challenges is a multiyear restructuring plan, which it continues to augment as industry conditions worsen, S&P noted.

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