DETROIT — General Motors received a credit rating upgrade from one of the three major ratings agencies last week in a vote of confidence that the company has improved its financial standing and can weather challenges in Europe.

DETROIT — General Motors received a credit rating upgrade from one of the three major ratings agencies last week in a vote of confidence that the company has improved its financial standing and can weather challenges in Europe.

Fitch Ratings upgraded GM's issuer default rating from BB to BB+ and said the outlook for the future is stable.

"Since exiting bankruptcy in 2009, GM has adhered to a strategy of maintaining a low level of automotive debt on its balance sheet, while also maintaining a high level of cash and credit facility availability," Fitch said in a statement. "This has provided the company with substantial financial flexibility that would allow it to withstand a future auto industry downturn."

The upgrade comes as GM is generating big profits in North America but facing steep losses in Europe, where consumers are conserving cash amid a sovereign debt crisis.

Overcapacity has prompted automakers to offer deep discounts on vehicles.

Fitch said GM has sufficient liquidity and profits to justify the upgrade, which can lower borrowing costs.

The agency pointed to GM's $33 billion of automotive cash, cash equivalents and marketable securities at the end of the second quarter as a sign of stability. "It's one more clear sign that we're moving the business in the right direction for long-term, profitable growth," GM spokesman Jim Cain said.

The automaker posted a global profit of $1.5 billion in the second quarter, down 41 percent from a year earlier but better than analysts expected. In North America, GM earned $1.965 billion, but in Europe it swung from a $102 million profit a year ago to a $361 million loss.

Barclays analyst Brian Johnson last week projected GM Europe losses of $464 million in the third quarter and $442 million in the fourth quarter.