DETROIT -– Citing uncertainty over the outcome of its dealings with bankrupt auto supplier Delphi Corp. and the continuous erosion of the company’s sales and U.S. market share, Standard & Poor’s has lowered General Motor’s debt rating from BB- to B, according to The Detroit News.

The downgrade is the latest blow to GM, which has been struggling to the tune of nearly $5 billion in North American automotive losses this year, and is steadily stirring speculation of a possible bankruptcy. S&P raised concerns about GM’s ability to recover from poor sales, and expressed doubt that the new large SUVs arriving in 2006 will bring the comeback the company predicts as consumers are moving toward more fuel-efficient vehicles.

In addition, GM could possibly be on the hook for up to $12 billion in pension and benefit obligations to bankrupt auto supplier Delphi Corp, which it spun off in 1999. Union workers at Delphi are also threatening to strike over proposed wage cuts – a move that could shut down GM in days.

GM’s credit rating means the company pays more to borrow money. S&P did applaud the company’s plans to close 12 facilities and cut 30,000 hourly jobs by 2008, but added that GM probably won’t see the benefits of those moves for several years.