UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549-1004
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) October 10, 2005
GENERAL MOTORS CORPORATION
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(Exact Name of Registrant as Specified in its Charter)
STATE OF DELAWARE 1-143 38-0572515
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(State or other jurisdiction of (Commission (I.R.S. Employer
Incorporation or Organization) File Number) Identification No.)
300 Renaissance Center, Detroit, Michigan 48265-3000
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (313) 556-5000
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Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
{ } Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
{ } Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
{ } Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
{ } Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 8.01. OTHER EVENTS
On October 10, 2005, Standard & Poor's lowered their ratings of General Motors
Corporation (GM). Their press release follows.
GM Rating Lowered to `BB-`, Still Watch Negative; GMAC Rating Unchanged, Now
Watch Developing
NEW YORK (Standard & Poor's) Oct. 10, 2005--Standard & Poor's Ratings Services
said today that it lowered its long-term corporate credit rating on General
Motors Corp. (GM) to 'BB-' from 'BB' and its short-term corporate credit rating
to 'B-2' from 'B-1'. These ratings remain on CreditWatch with negative
implications, where they were placed on October 3.
The ratings of General Motors Acceptance Corp. (GMAC), and all GMAC-related
entities, including Residential Capital Corp. (ResCap) are not changed (see
list below). These ratings remain on CreditWatch but the implications are
changed from negative to developing, which means that the ratings could be
raised or lowered. The potential for downgrades of GMAC and ResCap does not
reflect deterioration in their operating performance or financial condition,
but stems strictly from the downgrade of parent GM. The potential for upgrades
depends on these entities achieving substantial separation from their
parent--through strategic actions that would alter the ownership and control of
the subsidiaries. Such an outcome now seems more likely to occur, given the
increased challenges that GM is facing.
Consolidated debt outstanding totaled $284 billion at June 30, 2005.
"The downgrade follows Delphi Corp.'s bankruptcy filing, repercussions of which
could impede GM's efforts to turn around its ailing North American automotive
operations," said Standard & Poor's credit analyst Scott Sprinzen.
GM will likely face demands from Delphi for price relief on components GM
sources from Delphi. Absent such price concessions, GM's operations could be
disrupted by actions on the part of Delphi to reject certain supply contracts
with GM. GM also is exposed to the risk of supply disruptions caused by labor
strife at Delphi, as Delphi seeks to downsize its workforce and reduce wage
rates. In addition, developments at Delphi could adversely affect GM's own
labor relations, at a time when GM continues to seek concessions from the UAW
to reduce GM's burdensome health care costs. Moreover, GM will likely have to
assume a portion of Delphi's pension and retiree medical obligations --
obligations which GM has guaranteed. GM may ultimately be able to reduce its
purchased materials costs as a result of Delphi's restructuring and GM's
ability to transfer components sourcing to other suppliers; however, any such
saving will take a number of years to materialize, at best.
The continuing CreditWatch review reflects other concerns about the state of
GM's North American business, amid sharply deteriorating product mix and sales
volume, and prospects for persisting severe pricing pressure. We believe
soaring gasoline prices after Hurricanes Katrina and Rita are leading to an
accelerating decline in demand for SUVs. GM will soon launch a family of
all-new midsize and large SUVs. Given GM's disproportionate reliance on
SUV-related earnings, its ability to return to meaningful profitability in its
automotive business will be heavily influenced by the success of these new
models, despite GM's efforts to strengthen its product offerings in other
segments.
Ratings List
To From
General Motors Corp.
Corporate credit rating BB-/Watch Neg/B-2 BB/Watch Neg/B-1
General Motors Acceptance Corp.
Corporate credit rating BB/Watch Dev/B-1 BB/Watch Neg/B-1
Residential Capital Corp.
Corporate credit rating BBB-/Watch Dev/A-3 BBB-/Watch Neg/A-3
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GENERAL MOTORS CORPORATION
(Registrant)
Date: October 11, 2005 By: /s/PETER R. BIBLE
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(Peter R. Bible, Chief Accounting
Officer)