NEW YORK, Sept. 29 (UPI) -- Standard & Poor's rating service said it was giving U.S. automaker General Motors an upgraded credit rating based on its new labor contract.
The United Auto Workers Union ratified a four-year contract with GM this week, prompting S&P to push GM's rating from BB minus to BB plus, one increment below investment grade, the Detroit Free Press reported Thursday.
"We believe the contract will allow for continued profitability and cash generation in North America,"said S&P Managing Director Robert Schulz in a statement.
GM Chief Financial Officer Dan Ammann said, "Our fortress balance sheet and low break-even point are helping us succeed even in uncertain economic times, so we can stay focused on building great products and driving profitable growth around the world."
Looking ahead to a potential UAW agreement with Ford Motor Co., Shulz said, "We expect to raise our rating on Ford to BB+ and assign a stable outlook if Ford's U.S. labor negotiations are resolved and ratified, and the outcome does not place Ford at a significant disadvantage relative to …General Motor Co.'s recently concluded labor contract."