Fitch Ratings cut its ratings on General Motors Corp. (GM) and its finance arm deeper into junk status Monday, citing lack of progress at cutting costs and risks surrounding the restructuring of Delphi Corp (DPH).

Fitch has downgraded GM's ratings three times this year as the world's largest automaker has battled soaring employee benefit costs and competition from foreign rivals. GM lost $2.5 billion in North America in the first half of 2005.

Recent sales incentives have lowered market prices, making GM increasingly vulnerable to sales volume declines, Fitch said. Persistently high gasoline prices are also expected to reduce demand for GM's large vehicles, the majority of its new products, the rating agency said.

"We are firmly committed to improving our performance in North America," said GM spokesman Jerry Dubrowski. "We recognize that there is work to be done to improve our cost position."

GM bonds with an 8.375 percent coupon due in 2033 were little changed at 79.75 cents on the dollar, versus 79.38 cents on Monday, according to MarketAxess. Its shares rose 8 cents, or 0.26 percent, to $31.15 on the New York stock exchange.

Fitch cut the senior debt rating on GM and General Motors Acceptance Corp (search) to "BB," the second-highest junk rating, from "BB-plus." The rating outlook is negative, meaning another downgrade is likely over the next one to two years. Ratings downgrades usually raise borrowing costs.