GM, Ford Downgraded to Junk Status

suv_stuck.jpgStandard & Poors has downgraded its corporate credit ratings for both Ford and General Motors to junk status. The news sent both companies’ stock price tumbling by 5%, and left investors asking: why? According to S&P, lousy SUV sales have a lot to do with it.

S&P said its greatest immediate concern for Ford is the prospect that its sport utility vehicle business will not be able to generate the profitability it’s enjoyed historically. Ford’s financial performance has been heavily dependent on the earnings of its SUVs but sales of midsize and large SUVs have plummeted of late

The question is – with lower gas prices nowhere in sight, will American car companies refocus on the more efficient vehicles that have beefed up the profits and market share of their Japanese competitors?

Nick Aster is a new media architect and the founder of has grown to become one of the web's leading sources of news and ideas on how business can be used to make the world a better place.

Prior to TriplePundit Nick worked for Mother Jones magazine, successfully re-launching the magazine's online presence. He worked for, managing the technical side of the publication for 3 years and has also been an active consultant for individuals and companies entering the world of micro-publishing. He earned his stripes working for Gawker Media and Moreover Technologies in the early days of blogging.

Nick holds an MBA in sustainable management from the Presidio School of Management and graduated with a BA in History from Washington University in St. Louis.

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