DETROIT (AP) - A New York rating agency declared billions of dollars of debt owed by General Motors and Ford to be "junk" on Thursday, a significant blow that will increase borrowing costs and limit fund-raising options for the nation's two biggest automakers. Shares of GM fell almost 6 percent and Ford shares declined 4.5 percent after Standard & Poor's Ratings Services downgraded the debt to below investment grade, which is commonly known as junk or high-yield status. Both companies responded by saying they face no cash crunch and that they disagreed with the decision by S&P analysts. >> Original Article @ MyWay
Well... So their credit rating now equals the actual value/quality of their cars... Why am I not surprised... Dave
I actually am surprised by this... since it happened sooner than expected. I always thought the bottom would drop out the year mass-production of Toyota hybrids began in the United States. But the stupidity of intentionally breaking basic economic-survival rules in the name of short-term gain (greed) accelerated their own demise. With the inevitable permanent climb in oil prices due to the worldwide increase in demand, it was clear that diversification was necessary. But they ignored those obvious signs of change... to the point of claiming hybrid technology was a waste of effort, just a "stop gap" for the change that would be required a decade or two later. Instead, reality came crashing down just a few years later. Now they're screwed. Too bad I didn't archive some of those silly monster-size Pickup & SUV advertisements, promoting the incredibly arrogant attitude toward satisfying the desire for power. I had no idea their departure would be so dramatic. At least I documented the nonsense in my logs. The next few years sure are going to be fun. Rather than fighting hybrids, they are going to be desperately scrambling to catch up.
I don't remember as I was young and didn't really pay attention to the world but isn't this the same kind of attitude the American car companies had when we had the last oil crisis. Didn't people get rid of their land yacht cars back then in favor smaller, more efficient Japanese cars? And the American car companies had to play catch up. Welcome to history repeating itself.
