GM and Ford take another nosedive
Despite emergency loans to GM and Chrysler, ratings agencies predict another tough year for the Big Three in 2009, sending GM and Ford shares down 15%
NEW YORK (CNNMoney.com) -- Shares of General Motors and Ford Motor took a dive on Tuesday after ratings agencies issued bleak outlooks for the U.S. auto industry.
Shares of General Motors (GM, Fortune 500) plunged 14.8% and Ford (F, Fortune 500) 15.4%.
On Monday, Standard & Poor's Rating Services said it would not raise its "CCC" junk ratings for General Motors and Chrysler in the near future, despite emergency loans from the U.S. and Canadian governments to help them avoid bankruptcy.
In fact, S&P downgraded Chrysler's corporate rating from "CCC+" to the even lower junk rating of CC.
"We do not believe governments are willing to provide open-ended support to these companies," said S&P in a release, adding that bankruptcy risk "remains high" for GM, Chrysler and Ford in 2009.
Also on Monday, Moody's Investors Service lowered Ford's rating from "Caa1" to "Caa3," an even lower junk bond status.
"Even if Ford ends up not needing government loans because of its stronger liquidity position, the company must have UAW [union] parity with GM and Chrysler," said Moody's senior vice president Bruce Clark, in a report. "But the UAW is unlikely to make concessions to Ford unless Ford's creditors also bear some pain in the form of a debt restructuring."
Toyota Motor (TM) slid a fraction of a percent Tuesday, following its Monday forecast that the company would report an operating loss of about $1.5 billion to $1.7 billion this fiscal year, its first operating loss since 1950.
On Tuesday, The Wall Street Journal reported that Toyota Chief Executive Katsuaki Watanabe would step down in 2009, according to "people familiar with the situation." A Toyota spokeswoman would not comment on the report. 
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