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GM, GMAC RATINGS AFFIRMED BY FITCH AFTER PENSION DISCLOSURE -- FITCH FINANCIAL WIRE --

 NEW YORK, Nov. 2 /PRNewswire/ -- General Motors Corp.'s (NYSE: GM) "A-" senior debt and "BBB+" preference shares are affirmed by Fitch. General Motors Acceptance Corp.'s "A-" senior debt and "F-1" commercial paper ratings also are affirmed. GM's credit trend is improving, while GMAC's is stable.
 GM recently disclosed that further lowering the discount rate to calculate the present value of its pension liabilities, combined with pension provisions in its new labor contract, would raise its global unfunded liability to $24 billion at year-end 1993. This compares to GM's May 1993 forecast of $19 billion and a reported $14 billion at year-end 1992. This revision is caused by a further decline in long- term interest rates from the 8.6 percent discount rate GM used in 1992. The lower discount rate would also raise GM's FAS 106 obligation for postretirement health care obligations by over $5 billion, but not affect cash or cash flow.
 While Fitch is concerned as to the magnitude of this accounting liability, GM has demonstrated some progress in mitigating it. GM's fiscal 1993 investment performance exceeded its 10 percent rate of return assumption, and the company contributed over $4 billion to the pension plan to date in 1993, more than double the ERISA minimum.
 Pension funding and contract concerns are somewhat mitigated by GM's improving operating and financial performance in North America. Cash and cash flow have improved substantially, debt has stabilized, and GM has not raised external capital since November 1992. GM's board remains highly committed to funding its pension gap by 2000, but this implies substantial annual funding needs going forward, and slower debt reduction than originally anticipated.
 Over the near term, GM should continue to downsize its cost structure, which, combined with U.S. automotive replacement demand and new product flow, should support cash flow to fund capital programs and pension liabilities. However, the new labor contract does not appear to ease GM's difficulties meaningfully in bringing its capacity and labor force into line with market realities.
 Longer-term, concerns center around the cyclicality of the auto business, GM's new product success, and the company's ability to deal with the competitive disadvantages posed by a tough labor contract and escalating pension and health care costs. Between now and 2000, the U.S. is likely to experience another recession, and accompanying cash flow weakness may confront GM with a painful tradeoff between its product and pension funding.
 -0- 11/2/93
 /CONTACT: Mary Anne Sudol, CFA, 212-908-0562, or Nancy E. Stroker, CFA, 212-908-0533, both of Fitch/
 (GM)


CO: General Motors Corp.; General Motors Acceptance Corp. ST: Michigan IN: AUT SU: RTG

MP -- NY062 -- 9644 11/02/93 12:17 EST
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Publication:PR Newswire
Date:Nov 2, 1993
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