JP Morgan widens loss view on GM, Ford

(Reuters) - J.P. Morgan Securities widened its fourth-quarter loss estimates for automakers General Motors Corp and Ford Motor Co, citing what it called a fundamentally altered credit environment.

The brokerage said simultaneous weakness on both sides of the Atlantic, including a potential 15 percent fall in Western European auto sales in 2009, makes 2009 uniquely painful.

"General Motors and Ford are both likely to survive, but we now see higher 09 cash burn rate," the brokerage added.

The brokerage widened General Motors' 2008 loss estimate to $21 a share from $20.25 a share, and the 2009 loss estimate to $16.25 a share from $11 a share.

For Ford Motors it widened the 2008 loss estimate to $3.20 a share from $3 a share, and for 2009 to $1.90 loss per share from $0.95 a share.

J.P. Morgan also cut its earnings estimates on U.S. auto parts suppliers and downgraded four companies in its coverage, saying double-digit production declines on both sides of the Atlantic in 2009 may result in considerable balance sheet stress.

Companies with low cash balances are likely to rely on revolving lines of credit, perhaps until 2010, to get through the downturn, but the share value of such suppliers could fall, the brokerage added.

The rating changes on U.S. auto parts suppliers are:

COMPANY NEW RATING OLD RATING

Borgwarner Overweight Neutral

TRW Automotive Underweight Neutral

Lear Underweight Neutral

American Axle &

Manufacturing Neutral Overweight

Dana Neutral Overweight

(Reporting by Eric Yep in Bangalore; Editing by Jarshad Kakkrakandy)