General Motors faces impact of cut rating

General Motors Corporation announced the biggest decrease in 26 years due to cut rating.

Photo: General Motors faces impact of cut rating

Citigroup Inc. has transformed the world's largest automaker to 'hold' from 'buy,' citing 'cash-burn risks' as raw-materials costs rise.

The company’s shares swooped 45 cents, or 2.6 percent, to $17.15 at 1:40 p.m. in New York Stock Exchange composite trading, the lowest intraday price since August 1982.

Actually, GM was the global industry sales leader for the last 77 calendar years, until Toyota recorded higher sales figures in the first quarter of 2008.

In 2007 General Motors workers represented by the United Auto Workers union went on the first nationwide strike against GM since 1970. The ripple effect of the strike reached into Canada the following day as two car assembly plants and a transmission facility were forced to close. However, overnight a tentative agreement was reached and UAW officials declared the end of the strike.

A strike at American Axle and Manufacturing Holdings Inc. resulted in lost production of an additional 230,000 vehicles in the second quarter, with an estimated $1.8 billion impact on earnings before tax, with a total strike cost of $2.81 billion.

American Axle & Manufacturing Holdings Inc. is highly recommended for buyouts, having better liquidity, more opportunities for new business and higher possible labor savings under its new labor contract. Its rating was transformed to 'buy' from 'hold.'

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