UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549-1004
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) October 25, 2004
GENERAL MOTORS CORPORATION
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(Exact Name of Registrant as Specified in its Charter)
STATE OF DELAWARE 1-143 38-0572515
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(State or other jurisdiction of (Commission (I.R.S. Employer
Incorporation or Organization) File Number) Identification No.)
300 Renaissance Center, 48265-3000
Detroit, Michigan (Zip Code)
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(Address of Principal Executive Offices)
Registrant's telephone number, including area code (313) 556-5000
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Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 8.01. OTHER EVENTS
On October 25, 2004, Dominion Bond Rating Service Limited (DBRS) confirmed
short-term ratings at R-1 (low) and downgraded long-term ratings to BBB (high),
all with stable trends, for General Motors Corporation (GM) and General Motors
Acceptance Corporation (GMAC). Their press release follows:
Date of Release: October 25, 2004
Downgrades Long-Term Debt to BBB (high), Confirms at R-1 (low), Removed from
Under Review - Negative
Current Date: Monday, October 25, 2004
Issuer Debt Rated Rating Rating Trend
Action
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General Motors Acceptance Commercial Confirmed R-1 Stb
Corporation Paper (low)
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General Motors Acceptance Commercial Confirmed R-1 Stb
Corporation (N.Z.) Limited Paper (low)
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General Motors Acceptance Commercial Confirmed R-1 Stb
Corporation (U.K.) plc Paper (low)
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General Motors Acceptance Commercial Confirmed R-1 Stb
Corporation of Canada, Paper (guar. by (low)
Limited GMAC)
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General Motors Acceptance Commercial Confirmed R-1 Stb
Corporation, Australia Paper (low)
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General Motors Corporation Commercial Confirmed R-1 Stb
Paper (low)
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General Motors of Canada Commercial Confirmed R-1 Stb
Limited Paper (low)
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GMAC Bank GmbH Commercial Confirmed R-1 Stb
Paper (low)
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GMAC Commercial Mortgage Commercial Confirmed R-1 Stb
Bank Europe, plc Paper (low)
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GMAC Commercial Mortgage Commercial Confirmed R-1 Stb
Japan, K.K. Paper (low)
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GMAC International Finance Commercial Confirmed R-1 Stb
B.V. Paper (low)
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GMAC, Australia (Finance) Commercial Confirmed R-1 Stb
Limited Paper (low)
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General Motors Acceptance Senior Downgraded BBB Stb
Corporation Long-Term Debt (high)
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General Motors Acceptance Medium & Downgraded BBB Stb
Corporation (N.Z.) Limited Long-Term Debt (high)
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General Motors Acceptance Notes & Downgraded BBB Stb
Corporation of Canada, Debentures (high)
Limited (guar. by GMAC)
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General Motors Acceptance Medium & Downgraded BBB Stb
Corporation, Australia Long-Term Debt (high)
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General Motors Corporation Long-Term Debt Downgraded BBB Stb
(high)
General Motors Corporation Convertible Downgraded BBB Stb
Debentures (high)y
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General Motors Corporation Ind. Dev. Downgraded BBB Stb
Empower. Zone (high)
Rev. Bds., S2004
(Issued by NYC Ind.
Dev. Agency,
Guar. by GMC)
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General Motors of Canada Long-Term Debt Downgraded BBB Stb
Limited (high)
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GMAC Bank GmbH Medium & Downgraded BBB Stb
Long-Term Debt (high)
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GMAC Commercial Mortgage Long-Term Debt Downgraded BBB Stb
Funding, plc (high)
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GMAC Commercial Mortgage Medium & Downgraded BBB Stb
Japan, K.K. Long-Term Debt (high)
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GMAC International Finance Medium & Downgraded BBB Stb
B.V. Long-Term Debt (high)
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Note: General Motors Acceptance Corporation of Canada, Limited; General
Motors Acceptance Corporation (N.Z.) Limited; General Motors Acceptance
Corporation, Australia; GMAC Bank GmbH, GMAC Commercial Mortgage Funding, plc;
GMAC Commercial Mortgage Japan, K.K.; and GMAC International Finance B.V. debt
is guaranteed by General Motors Acceptance Corporation.
DBRS has downgraded the long-term debt ratings of the General Motors group
of companies ("GM" or the "Group") to BBB (high) from A (low), all with Stable
trends. With these rating actions, the Company has been removed from "Under
Review With Negative Implications".
In the past, the Group's rating has been influenced by two key factors: (1)
the long-term decline in GM's market share, and (2) high sales incentives, which
were impacting margins. However, three other key factors are influencing the
ratings, which resulted in the downgrades: (1) Rising health care costs. The
inability to drive health care cost increases down from GM's initial health care
cost inflation rate of 8.5% to its ultimate health care cost inflation rate of
5%. An upward revision to the initial trend rate (as recently indicated by
management) would cause an increase in the size of the net unfunded other
post-employment benefits (OPEB) liability ($57 billion as at December 31, 2003,
excluding Medicare subsidy of $4 billion). (2) Problems in GM Europe. The
problems in GM Europe are worse than expected and will be costly to remedy. The
Company's plan to lay off 12,000 personnel in Europe, particularly the 10,000
workers in Germany, will be costly and not without execution risk. (3) Rising
energy and material prices. High gasoline prices could impact the demand for
GM's highly profitable SUVs and pickup trucks. In addition, rising material
costs (steel and plastics) place further pressure on the already thin automotive
margins.
Nevertheless, the BBB (high) rating is still well supported by GM's
favourable balance sheet and good liquidity. DBRS expects that a solid
introduction of new vehicles should help stabilize market share over the next
five years. Price incentives have shown some evidence of moderating, which
together with the Company's long track record on cost reductions should help
stabilize earnings. Furthermore, General Motors Acceptance Corporation has a
relatively liquid portfolio of auto receivables, strong asset quality, and
continues to generate solid income. Thus, DBRS has assigned Stable trends to the
long-term debt.
Dominion Bond Rating Service (DBRS) will publish a full report shortly that
will provide additional analytical detail on this rating action. If you are
interested in receiving this report, please contact us at: info@dbrs.com.
Information contained herein is obtained by DBRS from sources believed by
it to be accurate and reliable. Due to the possibility of human or mechanical
error as well as other factors, such information is provided "as is" without
warranty of any kind and DBRS, in particular, makes no representation or
warranty, express or implied, as to the accuracy, timeliness, completeness,
merchantability or fitness for any particular purpose of any such information.
DBRS shall not be liable in contract, tort or otherwise for: (a) any loss or
damage in whole or in part caused by, resulting from, or relating to, any error
(negligent or otherwise) or other circumstance or contingency within or outside
the control of DBRS or any of its directors, officers, employees, independent
contractors, or agents in connection with, or related to, obtaining, collecting,
compiling, analyzing, interpreting, communicating, publishing or delivering any
such information; or (b) any direct, indirect, special, consequential,
compensatory or incidental damages whatsoever (including, without limitation,
lost profits), even if DBRS is advised in advance of the possibility of such
damages, resulting from the use of or inability to use, any such information. In
addition to the foregoing, the rights of subscribers of DBRS are governed by the
terms and conditions of the applicable Subscription Agreement. In the event of
any conflict between this document and the Subscription Agreement, the
Subscription Agreement shall govern (without limitation, a conflict shall not
include the failure of the Subscription Agreement to cover a matter covered
herein). The credit ratings, if any, constituting part of the information
contained herein are, and must be construed solely as, statements of opinion and
not statements of fact or recommendations to purchase, sell or hold any
securities.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GENERAL MOTORS CORPORATION
(Registrant)
Date: October 26, 2004 By: /s/PETER R. BIBLE
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(Peter R. Bible,
Chief Accounting Officer)