US autos: grinding to a halt

Credit of the month

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Steven Zhu
ABN Amro

Underweight
Moody’s action on June 13 to cut GM’s long-term rating to Baa1 with a negative outlook was yet another reminder of the continuing difficulties in the North American car market. Only two weeks ago, DaimlerChrysler (DCX) was forced to issue a massive profit warning because of the intensely competitive state of the North American market.

The plight of GM and DCX raises the question of how long the price war can continue and ultimately at what cost. We note t

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