April 5 (Bloomberg) -- General Motors Corp.'s debt ratings were cut one notch to Baa3, the lowest investment grade, by Moody's Investors Service. The ratings company also said it was reviewing Ford Motor Co.'s debt for a possible downgrade.

Moody's said the cut at GM stems from ``an uncompetitive fixed-cost structure'' and ``steadily declining market share.'' Moody's began reviewing GM's ratings on March 16, when the automaker forecast its biggest quarterly loss since 1992.

The review of Ford's ratings was prompted by ``increasing risk.'' Ford may not meet a 2006 target of $7 billion in pretax profits. Moody's rates Ford debt at Baa1, three levels above non- investment grade.

GM and Ford, the two biggest U.S. automakers, have lost market share to Toyota Motor Corp. and other competitors. GM's market share declined to 25.7 percent in the first quarter from 27 percent a year ago while Ford declined to 19.5 percent during the period from 20.4 percent a year ago.

To contact the reporter on this story: Bill Koenig in Southfield, Michigan, at wkoenig@bloomberg.net

Last Updated: April 5, 2005 14:35 EDT