Credit rating agency Fitch on Sept. 26 cut the ratings of Ford Motor Co. and its captive finance arm, Ford Credit, and said it may also cut its ratings for General Motors Corp. and General Motors Acceptance Corp.

The actions could be a precursor for moves by Moody's Investors Service and Standard & Poor's, which are also reviewing the ratings of the two automakers for possible downgrade. Fitch's downgrade of Ford is the first to affect either company's short-term debt, known as "commercial paper."

Fitch cut its senior debt ratings for Ford and its Ford Motor Credit Co. finance arm two notches to "A-", its seventh-highest investment grade, from "A+." It also cut both entities' commercial paper ratings to "F2" from "F1." Its rating outlook is negative.

The rating agency also said it is reviewing for downgrade Detroit-based GM's and its GMAC finance arm's "A" and "F1" senior debt and commercial paper ratings.

According to Fitch, Ford suffers from "brand and quality-related issues," GM from "overcapacity" and both automakers from eroding market shares, falling profits, lower liquidity and more reliance on incentives.

Ford and GM last week said they will offer no-interest and low-interest financing on 2001 and 2002 model cars and trucks.

"Although North American industry sales are on a pace to produce the third-best year on record, volumes have been supported by a continuing upward trend in incentives," Fitch said. "This trend has been exacerbated by the decline in economic conditions and increased incentive activity following the events of Sept. 11."

Moody's rates both automakers' long-and short-term debt "A2" and "P-1," while S&P rates the respective debt "A" and "A-1." These ratings are roughly equivalent to Fitch's ratings for GM. Moody's expects to complete its review this autumn, and S&P by the end of October.