Fitch Report: General Motors Post-Employment Obligations

CHICAGO--Oct. 19, 2004--Global pension and other post-employment benefit obligations (OPEBs) are a serious medium-to-long term financial concern for General Motors (GM), and could continue to negatively affect the company's credit ratings, according to a Fitch Ratings report.

As of October 2004, GM's total pension liability is $102.4 billion, of which $87.3 billion is in the United States. GM also has $67.5 billion in OPEB, primarily health care, insurance and other benefits that the company is committed to providing both current retires and active employees. Pension liabilities and OPEB have grown substantially over the last six years, and these obligations were one of the key considerations to downgrades of GM and GMAC from 'BBB+' to 'BBB' by Fitch on Oct. 13, 2004. Fitch's Outlook remains Negative.

The report provides an analysis of each of GM's liabilities, and several key mitigating factors that could work in GM's favor to reduce these liabilities. Also discussed is an analysis of GM's health care obligations in relation to the US health care sector.

The full report 'General Motors Corp.'s Post-Employment Obligations' can be found on the Fitch Ratings web site at 'www.fitchratings.com'. Also available at the Fitch web site is the report 'State of the US Auto Sector,' the first in a three-part series analyzing key issues in the automotive sector, and a credit analysis on Ford Motor Company. Fitch affirmed the 'BBB+' rating and Stable Outlook on Ford on Oct. 1, 20043, 2004.