In an acknowledgement of GM’s poor returns to shareholders, CEO Mary Barra said, “as much as we like this recognition, we are focused on achieving even stronger performance and enhancing long-term shareholder value in the years to come.”
GM said today that Fitch Ratings has raised its credit ratings of both GM and GM Financial to investment grade. As a result, the corporate credit ratings for GM are now investment grade with all three major rating agencies.
GM earnings have been pommeled during the last several years because of billions in charges taken for safety recalls.
Moreover, GM still potentially faces billions more in charges against earnings from product liability suits and government fines resulting from its decade long coverup of defective ignition switches, including possible criminal charges from the Department of Justice.
The new GM corporate and GM Financial credit ratings assigned by Fitch are BBB- with a “stable” outlook. Each credit rating is one level higher than the previous GM and GM Financial ratings of BB+, which were assigned by Fitch in August 2012 and August 2013, respectively.
GM has now largely put back together its failed GMAC financial arm under the newer GM Financial. GMAC, aka Ally, Humpty Dumpy like, took a great fall into bankruptcy during the Great Recession when Wall Street firms peddled bad bonds particularly in the housing market that the ratings agencies endorsed as investment grade.
GM, its subsidiaries and joint venture companies sell vehicles under the Chevrolet, Cadillac, Baojun, Buick, GMC, Holden, Jiefang, Opel, Vauxhall and Wuling brands.
See:
- GM Q1 Underwhelms with $1.7 Billion Revenue Drop
- 2014 Profits All Drop at FCA, Ford, GM
- GM Q2 Flops with $200 Million Net Income. Stockholders Whacked with $1.2 Billion in Recall Charges
- Q1 Recall Charge at GM for Ignition Switches Now at $1.3 Billion. More Shareholder Earnings Nicks Will be Coming
- Ally Financial Repays $2.9 Billion of FDIC Debt
