Fitch Ratings still views Delaware as AAA

The woes of the U.S. automobile industry are certainly of great interest to those who work at two factories in northern Delaware.

Chrysler L.L.C., General Motors Corp. and Ford Motor Co. have been scrambling to restructure their North American operations and Delaware is likely to going to see the end of its auto plants.

Chrysler has said it intends to idle its Newark, Del. plant where it makes Dodge Durangos in late 2009. The automaker built the assembly plant there in 1951. According to the Associated Press, workers at Newark have until March 10 to consider buyout offers made by the company.

Meanwhile, GM's new labor agreement with the United Auto Workers doesn't envision continuing vehicle production at its Boxwood Road factory near Newport, Del., after 2011. That plant makes the Pontiac Soltice and Saturn Sky.

A total of about 2,800 people work at the two Delaware auto plants. In a state as small as Delaware, that would sound like trouble.

However, the credit rating agency Fitch Ratings on Friday affirmed Delaware's AAA rating on its $1.3 billion general obligation bonds. While the potential loss of the auto factories is a challenge, Fitch notes that the state has deliberately pursued policies to diversify its economic base beyond chemical and auto manufacturing, making it attractive to banking, business services and pharmaceuticals.

Even the loss of about 2,000 jobs at the former MBNA, which is the state's largest employer with about 8,000 employees, hasn't shaken Wall Street's faith in Delaware municipal debt. The job cuts followed Bank of America's acquisition of MBNA in January 2006.

What's not to like? The state employees' pension system is overfunded. (Not many states can claim that.) And Fitch notes that Delaware has "institutionalized protections designed to ensure surplus operations."