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GM 6.50 PERCENT SERIES C CONVERTIBLE PREFERENCE RATED 'A' BY FITCH -- FITCH FINANCIAL WIRE --

 GM 6.50 PERCENT SERIES C CONVERTIBLE PREFERENCE RATED 'A' BY FITCH
 -- FITCH FINANCIAL WIRE --
 NEW YORK, Feb. 12 /PRNewswire/ -- General Motors Corp.'s 6.50 percent Series C depositary shares (each representing 1/10 share of Series C convertible preference stock) are rated 'A' by Fitch. The company has placed $1.5 billion of this issue in offerings in the U.S. and in Europe. The depositary shares are convertible into GM's Class E common stock at the option of the holder at any time at a conversion price of $71.03 per share of Class E common stock. The shares are non-callable for four years: upon call, GM may elect redemption either in cash or in shares of GM's $1-2/3 par value common stock or any combination thereof.
 Late in 1991, GM unveiled a comprehensive plan to restore its North American automotive business to profitability. Losses in that sector had diluted the contribution from GM's profitable operations: international automotive, GMAC, Hughes, and EDS. Actions are designed not only to mitigate near-term stresses on GM's overall financial condition but also to strengthen the corporation's underlying competitiveness in North America. An important target is full capacity utilization in North America in 1993, and management has recently indicated that its goal is to have the enterprise achieve breakeven in 1992.
 Key operating elements of the program include actions lowering fixed and variable costs through shedding additional production capacity, reducing the hourly and salaried workforces, achieving further material cost savings, and improving productivity through changes in design and manufacturing processes. Other actions include a $1.1 billion reduction in capital outlays over 1992 and 1993, as well as product strategies designed to support GM's North American market shares.
 While Fitch believes these actions will strengthen GM's long-term creditworthiness, there are several obstacles that could delay the successful execution of cost-reduction actions. These would elongate the interval of stress on the company's financial condition.
 Lower anticipated market growth in North America will be driven by slower growth in disposable income and consumer spending. In particular, the ongoing de-population of middle management ranks in U.S. companies will likely shrink the number of potential car buyers. Political challenges and resistance to plant closures could result in delays in achieving cost reductions. It is also uncertain whether North American profitability can ultimately be restored to former levels, given keen competition from strong, well-capitalized overseas automakers.
 The credit trend is declining, reflecting Fitch's expectation of weak fundamental performance in 1992.
 -0- 2/12/92
 /CONTACT: Mary Anne Sudol of Fitch, 212-908-0562/
 (GM) CO: General Motors Corp. ST: Michigan IN: AUT SU: RTG


JT -- NY051 -- 9214 02/12/92 11:43 EST
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Publication:PR Newswire
Date:Feb 12, 1992
Words:446
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