GM stock plunges 31 percent, S&P may cut credit rating

General Motors Corp. had a rough day today.

Shares of the Detroit automaker have been slipping in the past week, as investors worried that the global credit crisis will particularly slam banks and automakers. But spurred by a statement today from Standard & Poor’s Ratings Service, the company’s stock tumbled 31 percent to close at $4.76 a share. Earlier in the day, it reached $4.65, a price the Associated Press said has not been seen since March 15, 1950.

Standard & Poor’s put GM on its CreditWatch list “with negative implications,” indicating it may downgrade the automaker’s B- long-term corporate credit rating.  The placement on the list reflects the “rapidly weakening state of most global automotive markets, along with capital market conditions that will remain a serious challenge for the foreseeable future,” Standard & Poor’s credit analyst Robert Schulz said in a statement.

“We believe GM currently has adequate liquidity for at least the rest of 2008 as measured by cash balances and available bank facilities, but the accelerating deterioration in industry fundamentals will be a serious challenge to liquidity during 2009,” the credit-ratings agency said.

GM spokeswoman Renee Rashid-Merem declined to comment on Standard & Poor’s actions but said the automaker will remain focused on its turnaround efforts and liquidity-increasing plans announced in July. Those efforts, which include increasing liquidity by $15 million through internal actions, largely are not based on the credit markets, she said.

Ford Motor Co.’s shares also fell today, dropping 22 percent to close at $2.08 after Standard & Poor’s put the Dearborn, Mich.-based automaker on CreditWatch “with negative implications.” Like GM, Ford has a B- long-term corporate credit rating.