By Jeff Gilbert, CBS Detroit
As GM makes a move to buy shares now owned by a retiree health care trust fund, word comes that the company has regained its investment grade status from a top ratings agency. That’s a status that GM lost in 2005, as it was heading toward bankruptcy four years later.READ MORE: Three Months After Their Daughter's Death, Maliyah Turner's Parents Are Still Seeking Justice
Moody’s investment service announcing the upgrade, saying that GM has a strong position in both the Chinese and North American markets.
“GM has been on a steadily improving operational and financial trajectory since it emerged from bankruptcy,” said Moody’s senior vice president Bruce Clark. “We think that the disciplines the company has embraced, combined with the strength of its US product portfolio and a healthy domestic market, will enable it to stay on that path.”
The ratings upgrade will make it easier for General Motors to borrow money in the future.
“Good things happen when you build great cars and trucks and deliver strong financial results,” said Dan Akerson, GM chairman and CEO. “Today’s news from Moody’s further underscores that this is exactly what we are doing today.”
When GM emerged from bankruptcy in 2009, the UAW VEBA was given a stake in the company, instead of money GM had promised to contribute to set up the fund.
This purchase gives the fund cash that’s needed for future benefits, and gives GM more long term control of its shares.
The deal is contingent on a seperate financing issue. After the deal, the UAW VEBA will still own 140 million GM shares.
This comes as the federal government is in the process of selling off its remaining stake in General Motors, and expects to be finished by early next year.MORE NEWS: With Cockburn Out, No. 17 Illinois Falls 81-65 To Maryland