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DCR Maintains GM's 'A-' Rating and Positive Outlook

13 March 2000

DCR Maintains GM's 'A-' Rating and Positive Outlook

    CHICAGO, March 13 Duff & Phelps Credit Rating Co. (DCR) is
maintaining its debt ratings for General Motors Corporation (GM) and its
financial services subsidiary, General Motors Acceptance Corp. (GMAC), after
the announcement that GM and Fiat S.p.A. will enter a strategic alliance and
cross-shareholding arrangement.
    The senior unsecured debt of GM and GMAC is rated 'A-' (Single-A-Minus),
GM's preference stocks and preferred securities are rated 'BBB+' (Triple-B-
Plus) and GM and GMAC's commercial paper is rated 'D-1' (D-One).   The Rating
Outlook continues to be Positive.  GM and GMAC had total debt outstanding at
December 31, 1999 of approximately $130 billion.
    GM and Fiat Auto, the Fiat subsidiary that produces the Fiat, Alfa Romeo
and Lancia brands, will form dedicated joint ventures to generate cost
synergies, initially focused in the purchasing, powertrain development and
manufacturing, and financial services areas.  The joint ventures will be in
Europe and Latin America, regions where GM and Fiat currently not only have
similar size in terms of total market share, but where each has particular
comparable strengths in certain products (e.g., Fiat in small diesel engines)
or in an individual country's market (naturally Fiat in Italy) that should
allow the joint ventures to benefit from economies of scale and attain the
targeted cost savings.
    The companies will also take significant cross-ownership positions,
currently valued at $2.4 billion, in each other.  This will result in GM
owning 20 percent of Fiat Auto and Fiat will own approximately 5 percent of GM
$1-2/3 par value common stock.  GM plans to offset the dilutive effect of
Fiat's 5 percent ownership stake by repurchasing an additional $2.4 billion of
its common stock, $1 billion from increasing the forthcoming Class H stock for
GM common stock exchange from $8 to $9 billion and $1.4 billion in cash
repurchases through a new share repurchase program in the second half of 2000.
With GM's current strong liquidity and good financial condition, the $1.4
billion level of cash investment will have minimal near-term impact on GM's
creditworthiness.  Longer term, Fiat's option under the alliance to put the
remaining 80 percent ownership of Fiat Auto to GM within the 2004 to 2009
timeframe may create some pressure on GM's future creditworthiness, but GM's
ability to choose GM stock as payment or cash payments over three years should
provide reasonable financial flexibility.
    DCR is a leading global rating agency with 34 local market offices
providing ratings and research on debt issues and insurance claims paying
ability in more than 50 countries.  For additional information, visit DCR's
Web site at http://www.dcrco.com.  DCR's research is also available on
Bloomberg at DCR and FirstCall's BondCall Direct/Research Direct at
http://www.firstcall.com, as well as through other third-party providers.