This poor financial performance heightens concerns about the company's ability to effect a timely turnaround in its critical North American operations.

We would view that as highly optimistic.

They've been skilled in their product development. But they, like their domestic competitors, are very dependent on light truck profitability. They've introduced some new S.U.V.'s at a point when that market is under a cloud.

Public sentiment regarding such vehicles has turned more negative than previously.

Product design issues are also an important concern here, as the companies have shown little ability to foresee market trends, such as the demand for crossover utility vehicles and gasoline-electric hybrids.

Under certain circumstances, G.M.A.C. could act to curtail its funding support of G.M.'s marketing operations, precipitating potential problems for G.M..

Ford has experienced a marked deterioration in its pension funding levels due to poor investment portfolio performance.

We are still nervous about our ratings, even at the reduced levels.

We believe soaring gasoline prices after Hurricanes Katrina and Rita are leading to an accelerating decline in demand for S.U.V.'s, ... disproportionate reliance on S.U.V.-related earnings.