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S&P report on U.S. automakers
Standard & Poor's said that issued a report on the potential credit impact of labor negotiations between the United Auto Workers and the three Michigan-based automakers.
The agency said the report discusses its view of the UAW talks on credit ratings for General Motors Corp., Ford Motor Co. and Chrysler LLC, specifically the credit implications of shifting future health care liabilities to union-managed trusts.
"For the U.S.-based automakers, the biggest near-term credit issue is their use of cash in their North American operations, of which retiree health care costs is clearly a large, but not the only, component," Standard &
Poor's credit analyst Robert Schulz, said in a written statement.
"Our long-standing view has been that unfunded benefit obligations for retirees, including defined benefit pension plans and health care coverage, are debt-like obligations that represent a future call on cash," Jonathan Nus, Standard & Poor's director of financial reporting analysis, said in a written statement.
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