The Credit Overhang: A Protracted European Recession Could Hurt Some U.S. Auto Sector Ratings Aug 12
Standard & Poors, August 2012
Abstract
Standard & Poor's Ratings Services views Europe as one of the biggest challenges facing the global auto and auto component sectors in 2012. A serious slowdown in China is another risk factor to watch, while the North American auto sales recovery remains a bright spot. We believe that if our economists' base-case forecast for a mild European recession in 2012 actually occurs, it would not have any effect on most of our ratings in the U.S. automotive sectors, although we could negatively revise our rating outlooks on some issuers. Certain U.S. automaker and auto component companies could, however, see negative rating actions if a marked European downturn lasted for two years, and particularly if it created a material contagion effect...
Companies mentioned in this report are:
- Ford Motor Co.
- Fiat SpA
- Lear Corp.
- Peugeot S.A.
- Harman International Industries Inc.
- BorgWarner Inc.
- Tenneco Inc.
- TRW Automotive Inc.
- Chrysler Group LLC
- General Motors Co.
- Delphi Automotive PLC
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
- Ford Motor Co.
- Fiat SpA
- Lear Corp.
- Peugeot S.A.
- Harman International Industries Inc.
- BorgWarner Inc.
- Tenneco Inc.
- TRW Automotive Inc.
- Chrysler Group LLC
- General Motors Co.
- Delphi Automotive PLC
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