S&P raises GM credit rating by two notches

(Reuters) - Ratings agency Standard & Poor's raised its corporate credit rating on General Motors Co <GM.N> by two notches on Thursday, saying the automaker's new labor contract would allow for continued profitability and cash generation in North America.

The ratings service revised up its credit rating on GM to BB+ from BB- and also raised its rating outlook to stable from positive.

The upgrade comes a day after the United Auto Workers union ratified a new four-year labor contract with GM, the first such deal for the top U.S. automaker since its 2009 bankruptcy.

"GM has a two-year track record of profits and cash flow generation in its global automotive operations, supported by strong performance in North America," Standard & Poor's said in a statement released on Thursday.

(Reporting by Soyoung Kim in Detroit; Editing by Derek Caney)