NEW YORK (CNN/Money) - Credit rating agency Standard & Poor's cut its rating on General Motors Corp. long-term debt to near-junk status Wednesday and could also cut its rating for Ford Motor Co.

The rating agency cut its long-term credit ratings on Detroit-based GM and its General Motors Acceptance Corp. finance arm one notch to "BBB," just two notches above "junk" status, from "BBB-plus," citing an increase in the automaker's unfunded pension liabilities.

S&P also said it might cut its "BBB-plus" long-term credit rating on Dearborn, Mich.-based Ford and its Ford Motor Credit Co. finance arm. Ford's downgrade also would likely be limited to one notch.

S&P said GM had $187 billion of debt as of September 30, while Ford had $162 billion, according to Reuters.

The agency also said it had put Ford and Ford Motor Credit long-term debt on "CreditWatch" with negative implications. It did not take similar action with GM.

S&P scheduled a conference call for 3:00 p.m. ET to discuss its ratings of both companies.

On Tuesday, GM, the world's largest automaker, reported third-quarter earnings of $672 million, or $1.20 a share, including operations at Hughes Electronics but excluding other one-time items, compared with $473 million, or 85 cents a share, a year ago.

The results topped consensus Wall Street estimates, and GM also raised its outlook for full-year 2002 earnings.

But GM also said its pension fund assets continued to suffer from overall market declines, ending the third quarter down 10 percent for the year, and it would have to put more of its operational cash flow into pensions than it originally planned.

On Wednesday, Ford reported third-quarter earnings of $220 million, or 12 cents a share, excluding special items, compared with a loss of $502 million, or 28 cents a share, a year ago. The results easily topped Wall Street estimates, but Ford warned its full-year results would miss estimates.

Standard & Poor's analyst Scott Sprinzen said he was worried Ford's gains in the third quarter would be offset by slumping North American demand, lack of pricing power due in part to the aggressive incentives offered by GM, and Ford's loss of market share.

"The CreditWatch listing primarily reflects concerns about the adequacy of restructuring measures being implemented by Ford to restore the competitiveness its core automotive operations," Sprinzen said.

Ford also said the return on its pension fund assets was down 15 percent year-to-date, pushing the fund's underfunding status to $6.5 billion in the third quarter from $3.2 billion at the close of the second quarter.

But Ford said it was not required to make any contributions to the fund until 2006 under federal pension regulations, although it expects to make contributions well before then.

Shares of GM (GM: down $2.56 to $34.14, Research, Estimates) and Ford (F: down $0.61 to $8.26, Research, Estimates) fell in afternoon trading.