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GENERAL MOTORS AND GMAC RATINGS REAFFIRMED

 CHICAGO, Dec. 22 /PRNewswire/ -- Duff & Phelps Credit Rating Co. announced today that it has reaffirmed its ratings of General Motors and GMAC's long-term debt at A-' (Single-A-Minus) and Duff 1 on GMAC's commercial paper. The two companies are indistinguishable from a credit perspective, despite the fundamental analytical criteria which might otherwise favor GMAC, due to the interdependency of their businesses and to intercompany financing arrangements.
 The reaffirmation reflects Duff & Phelps' conclusion that the restructuring measures under way at GM not only provide for a more appropriate cost structure but that these actions will improve the focus and execution in the product line strategy. There has been considerable management turnover providing the mandate necessary for real organizational changes. In the near-term, this will be most evident in terms of cost reduction. Longer-term, the overall product line strategy may need to be addressed more extensively before Duff & Phelps will be convinced that the 35 percent market share assumptions underlying the cost cutting moves will be sustainable. However, Duff & Phelps does believe that, to the extent of revenue shortcomings, additional steps can be taken to bring capacity in line with demand.
 "We see the auto industry as a core U.S. industry, with General Motors perhaps slightly under-performing the industry over the 3-5 year term," said Daniel J. Donoghue, senior vice president of the industrial ratings group at Duff & Phelps.
 "Nonetheless, GM will undoubtedly be a major player in this market and, characteristic of the industry, has considerable operating leverage through which it will benefit with eventual economic improvement," Donoghue added.
 The Duff & Phelps rating anticipates the huge SFAS 106 adjustments for retiree benefit accounting. These charges are non-cash and have no impact on the company's ability to reinvest in its business nor to meet its scheduled debt service obligations.
 -0- 12/22/92
 /CONTACT: Daniel J. Donoghue, CFA, CPA, Duff & Phelps Credit Rating Co., 312-368-3121/
 (GM)


CO: Duff & Phelps Credit Rating Co.; General Motors; GMAC ST: Illinois, Michigan IN: AUT FIN SU: RTG

KE -- DE012 -- 9193 12/22/92 13:57 EST
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Publication:PR Newswire
Date:Dec 22, 1992
Words:340
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