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General Motors and Ford are hemorrhaging cash and face problems that go beyond any economic slowdown, Standard & Poor's said Tuesday, warning of possible credit downgrades for U.S. automakers.

"It's not the economy," S&P analyst Scott Sprinzen said.

Ford is the strongest of the big three U.S. automakers, followed by GM and the Chrysler division of Germany's DaimlerChrysler AG, Sprinzen said.

Credit ratings are key to a company's ability to attract cash from investors. S&P, one of Wall Street's major rating agencies, said GM could face a credit downgrade within the next year and Ford within the next few years. DaimlerChrysler was downgraded in December.

Sprinzen said GM's cash holdings are near the minimum necessary under its current credit rating, while Ford's are adequate but shrinking.

Productivity slows in quarter

WASHINGTON (AP) -- Americans' productivity, a key measure of rising living standards, slowed to a 2.4 percent rate of growth in the last three months of 2000, reflecting a cooling economy.

Growth in productivity -- the amount of output per hour of work -- during the October-December quarter followed a 3 percent rate in the third quarter, the Labor Department said today.

The fourth-quarter performance was still a healthy gain and much better than the 1.5 percent rate of growth many analysts had forecast. But it was the slowest since a 2.1 percent rate in the first quarter of 2000.

Unit labor costs, a key gauge of inflation pressures, rose by a rate of 4.1 percent in the fourth quarter, up from a 3.2 percent rate in the previous quarter. The rise in fourth-quarter labor costs was the biggest since a 4.3 percent rate of increase in the second quarter of 1999. Labor costs rose more quickly in the fourth quarter than the 3.5 percent rate many analysts were expecting.

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