UAW contract prompts Standard & Poor's to raise GM's debt rating

[Bill USA]

http://www.freep.com/article/20110929/BUSINESS0101/110929020/1014/business01

Standard & Poor’s upgraded General Motors debt rating today after reviewing the company’s new four-year contract with the UAW, and said it may do the same for Ford if it reaches a similar deal.

“We believe the contract will allow for continued profitability and cash generation in North America,” Robert Schulz said in a statement about GM.


The UAW announced on Wednesday that its members had voted to ratify the contract by a nearly 2-1 ratio.


Standard & Poor’s increased GM’s debt rating from BB- to BB+, or one notch below investment grade. Higher credit ratings are desirable because they help to lower a company’s borrowing costs and interest payments.

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