Standard & Poor's affirmed General Motor's ( GM) stable credit outlook Friday after the company gave a lower earnings outlook for 2005. But the credit rating agency signaled that the "appropriateness" of the stable outlook will be reviewed in the coming months. The rating agency stuck with its triple-B-minus rating on GM, leaving the largest U.S. automaker with its credit rating one step above junk. But after having downgraded GM's debt on Oct. 14, S&P conceded the firm faces continued challenges to maintaining a stable rating, the removal of which would likely be the first step in S&P lowering GM's debt to speculative-grade status. Considering the enormous effect such an event would have on the corporate debt markets, and (potentially) the economy as a whole, S&P will likely be measured in its approach to any change in its rating on the automaker. "Our concerns regarding GM's ability to improve its competitiveness over a longer time period have grown incrementally in recent months, given the company's relatively poor sales performance in the U.S. and the aggressive growth plans articulated by competitors," said Standard & Poor's in a prepared statement. "In the coming months, we will further assess our views regarding GM's long-range prospects, focusing on the appropriateness of the stable rating outlook." A stable outlook means the company's rating is less likely to be lowered or raised over the next two years. If Standard & Poor's lowered its outlook, that could clear the way for a downgrade for one of the largest corporate bond issuers in the U.S. With short-term debt of $56 billion on its balance sheet and long-term borrowings of $235 billion as of September, a credit rating downgrade would multiply GM's already high borrowing costs. Add that to the company's astronomical health care and pension obligations, competitive weakness, declining profits, rising steel costs and litigation vulnerability, and the automaker's financial solvency could be in danger. While the three major credit rating agencies -- Standard & Poor's, Fitch Ratings and Moody's Investor Services -- have maintained the lowest investment-grade ratings on GM to date, their willingness to lower ratings any further could be hampered by the conflict of interest inherent to their position; these firms are compensated by the companies they rate. Meanwhile, some independent firms, like Egan-Jones Ratings, have already lowered their own ratings on the automaker to junk levels.