General Motors Co. and Ford Motor Co. are on the verge of winning back investment-grade credit ratings, nearly seven years after financial meltdowns turned their bonds into “junk.”

On Thursday, Standard & Poor’s Ratings Services lifted GM’s rating by two notches, to double-B-plus, just one step below investment grade. S&P cited two years of solid financial performance by GM and the benefits of its new, four-year labor deal with the United Auto Workers, reported The Wall Street Journal.

The ratings firm said Ford is in for a one-notch bump, also to double-B-plus, once it concludes its own deal with the union, expected as soon as this week.

“This is another external acknowledgment of the progress we are making. We laid out a strategy, and we executed that strategy,” GM’s finance chief, Daniel Ammann, said in an interview.

Last week, Moody’s Investors Service said it is also eyeing GM for a possible upgrade.

The move by S&P represents a redemption for GM, which for generations was known as a reliable investment bet. But it suffered years of decline and was forced into bankruptcy court amid recession and the financial crisis in 2009.

A return to investment-grade status could mean lower interest rates on borrowings by GM and Ford, and could clear the way for some institutional investors to buy their debt.

“I’ve started to dust off my old models to prepare for their triumphant return to high grade,” said Brian Beargie, director of research at Legal & General Investment Management America, which manages a $20 billion portfolio of mostly investment-grade bonds.

GM and Ford saw their credit ratings cut to non-investment grade, or “junk,” status in 2005. At the time, the companies shared many of the same problems: sinking U.S. market share, too many underused factories, crushing retiree health costs an over-dependence on profit-eroding incentives. But they have taken different roads to recovery.

GM, aided by a $50 billion U.S. government bailout and bankruptcy proceedings, cast off billions of dollars in debt, slashed its work force and shed unprofitable brands and models. After losing more than $90 billion between 2004 and 2009, the auto maker has become solidly profitable, earning $4.7 billion last year. It has around $5 billion in debt, but faces a shortfall in its U.S. and global pension programs.

Beyond its balance sheet, GM sales are up, even though it has eliminated four of its eight brands, and profit per vehicle has been on the rise as the company commands higher prices.

Ford borrowed $23.5 billion in 2006 and was able to turn itself around without a government bailout or a bankruptcy filing. Under Chief Executive Alan Mulally, Ford closed plants, sold off niche brands like Land Rover and Jaguar and put most of its resources into its Ford division.

The company has been working to pare its debt. Ford recently paid down an additional $1.8 billion of long-term debt and now has just $12.2 billion in automotive debt, down from $33.6 billion at the end of 2009.

A Ford spokesman said the company is making progress. “Ultimately, the credit-rating agencies determine when we return to investment grade. Our job is to stay focused on making progress on our plan,” said Ford spokesman Todd Nissen.

S&P analyst Robert Schulz said GM and Ford, while taking different paths, should hold similar appeal to investors. “There are more similarities than differences,” he said. Ford carries a far higher debt burden than GM, for instance, but GM is weighed down by underfunded pension obligations. GM has an advantage over Ford because of the strength of its global operations, while Ford has the edge in the U.S., Mr. Schulz said.

A ratings boosts doesn’t mean the auto makers are in the clear. To return to investment grade, S&P said, the companies must resist the urge to return to big discounts to juice sales amid a depressed auto market and avoid overproducing vehicles.

“The whole idea all along has been to set the company up to deal with any environment we face,” said GM’s Mr. Ammann. “We are prepared.”

Ford Motor Co., which hasn’t paid a dividend in five years, expects to resume paying one in the “relatively near future,” and is no longer tying such a move to achieving an investment-grade debt rating.

“As our balance sheet continues to improve, we expect to resume paying a dividend,” Controller Bob Shanks said today at the Citi Global Industrials Conference in Boston. “We expect this to occur in the relatively near future.”

Ford suspended its dividend in September 2006. Chief Financial Officer Lewis Booth said at a Sept. 9 investor conference that Ford won’t resume paying a dividend until after returning to an investment-grade credit rating. Standard & Poor’s rates Ford debt at BB-, three levels below investment grade, with a positive outlook, reported Bloomberg.

“We do not need to be investment grade before resuming our dividends,” Todd Nissen, a Ford spokesman, said in an e-mailed statement after today’s presentation.

The second-largest U.S. automaker earned $4.95 billion in the first half of the year, as fuel-efficient models like the Fiesta subcompact attracted buyers. Ford’s U.S. light-vehicle sales are up 12 percent this year through August, ahead of the industrywide gain of 10 percent.

The automaker is seeking to lower labor costs in contract talks with the United Auto Workers. The current contract covering Ford’s 41,000 U.S. hourly workers expired Sept. 14 and was extended. General Motors Co. reached a tentative agreement with the UAW Sept. 16, subject to ratification vote by workers.

Chief Executive Officer Alan Mulally raised prices this year to offset some of the $4 billion in higher costs the company expects in 2011, including manufacturing spending.

Ford earned $9.28 billion in the past two calendar years after $30.1 billion in losses from 2006 through 2008. The automaker borrowed $23.4 billion in late 2006, putting up all major assets including its blue oval logo as collateral. That helped Ford avoid the bankruptcies and bailouts that befell the predecessors of GM and Chrysler Group LLC.

Ford slid 45 cents, or 4.3 percent, to $9.97 at 4 p.m. in New York Stock Exchange composite trading. The shares have fallen 41 percent this year.

Ford Motor Co. will pay down $1.8 billion of its long-term debt today and continues to negotiate a new agreement with the United Auto Workers as precursors to restoring the investment grade status it lost in 2006.

“We’ve fixed the business fundamentals,” Lewis Booth, Ford chief financial officer, said Wednesday at the UBS Frankfurt Auto Show Investor Conference. “The only real stumbling block is to get past the UAW negotiations successfully.”

Ford’s four-year contract expired at midnight but was extended to keep plants running as talks continue, reported The Detroit News.

The UAW wanted agreements with General Motors Co. and Chrysler Group LLC first.

Booth told investors he thinks economic uncertainty is also affecting an upgrade of Ford’s credit rating.

“They think our financial metrics are working at investment grade now,” he said, referring to Moody’s Investors Services, which has Ford two notches below grade.

At the end of June, total debt was $14 billion. Ford is using its $22 billion in cash reserves to retire the final $1.8 billion of a $7 billion long-term loan secured in 2006 and maturing at the end of 2013.

Automotive debt will be about $10 billion in 2015, far from the $33.6 billion at the end of 2009, Booth said.

“If cash continues to grow, we’ll look at further shareholder actions,” Booth said, without elaborating.

“Paying down the debt is a further sign of confidence in their business plan,” said Charles Moore, senior managing director of Conway MacKenzie Inc. in Birmingham.

“When companies are nervous, they have a hard time parting with cash,” he said.

In other projections, Booth said revenue and pricing will improve and capital spending will increase $500,000 to $6 billion.

Booth said the automaker will cut costs and respond accordingly if the economy experiences significant downturns.

But the company is leaner and better able to weather turmoil.

“Our balance sheet is a lot cleaner than two years ago.”

WASHINGTON — Federal regulators closed two investigations into safety issues in Ford Motor Co. vehicles —deciding that a recall of 1.1 million F-150s and other trucks was sufficient to address concerns, the government said Thursday.

The National Highway Traffic Safety Administration said it was closing its investigation into more than 1 million F-150 trucks after it was satisfied with Ford’s recall, reported The Detroit News.

In August, Ford said it was calling back 1997-2004 F-150s in “salt-belt” states after reviewing 700 complaints of corrosion of steel straps holding up fuel tanks.

Most of reports involved one or both straps failing — and about half involved the tank dropping and or dragging on the ground. There were 180 reports of leaking fuel.

Ford said 97 percent of complaints came from states that use large amounts of road salt.

Ford received two reports of a vehicle fire destroying a vehicle and a third in which a fire destroyed the vehicle and injured a driver.

“Ford’s recall action appears to adequately address the problem at this time,” NHTSA said in a report closing its investigation.

The recall covers some 1997-1999 F-250 and 2002-2003 Lincoln Blackwood trucks. The recall covers vehicles sold or registered in 21 salt-belt states, including Michigan, Ohio, New York, Pennsylvania and Indiana, and the District of Columbia.

Separately, NHTSA said it is also closing an investigation into 387,354 2010-2011 Ford Escape and Mercury Mariner SUVs into complaints that the liftgate glass shattered without warning.

NHTSA said it reviewed nearly 300 complaints into the issue, including 15 minor injuries.

Ford acknowledged a higher than normal level of glass breakage incidents in the 2010 model year and early 2011 vehicles.

Ford investigated the incidents “but failed to identify an anomaly in the glass manufacturing process” to explain the spike in reports, NHTSA said.

In November, Ford issued a Technical Service Bulletin to include broken liftgate glass on all 2010 Escape and Mariners — as well as some 2011 models.

In September 2004, Ford recalled about 955,000 Ford Explorer and Mercury Mountaineer SUVs from the 2002 and 2003 model years to replace the liftgate glass strut brackets and hinges.

Ford Motor Co., which fell below $10 yesterday for the first time in 13 months, is not receiving the credit it deserves from investors, Bank of America Corp. said.

Ford shares, which dropped 41 percent this year through yesterday, are trading at 2.6 times earnings before interest, taxes, depreciation and amortization, compared with a historical average of 4 to 5 times earnings, Bank of America analyst John Murphy wrote in a note today. Murphy added Ford to the company’s US 1 list of stocks with a buy recommendation, according to Bloomberg.

“Even in the downside scenario of a double-dip recession, Ford’s stalwart balance sheet is substantially healthier than in 2008,” Murphy wrote. “But we believe that the market is not giving Ford’s stock credit for the company’s balance-sheet health.”

Ford had net income of $4.95 billion in the first half of the year, as fuel-efficient models like the Fiesta subcompact attracted buyers in a slowing U.S. auto market. Ford paid down debt by $2.6 billion in the second quarter, leaving it with $22 billion in automotive gross cash and $14 billion in debt.

“The recovery in U.S. demand should drive the auto stocks higher while Ford’s product cycle hits a sweet spot driving market-share gains, with a ‘fortress-like’ balance sheet,” wrote Murphy, who has a price objective on Ford stock of $26. “It should also be noted that second-quarter results were solid.”

Ford, based in Dearborn, Michigan, rose 98 cents, or 9.9 percent, to $10.91 at 4:01 p.m. in New York Stock Exchange composite trading. The shares closed yesterday at $9.93, the lowest since June 29, 2010.

The Dow Jones Industrial Average rose 429.92 points, or 4 percent, to 11,239.77. Yesterday, the Dow fell 634.76 points, or 5.6 percent, after Standard & Poor’s downgraded the U.S.’s credit rating Aug. 5 to AA+ from AAA.

“The near-term economic challenges are clear, and we see the U.S. debt ceiling law and European Central Bank bond purchase as constructive developments to stabilize the global economy,” John Stoll, a Ford spokesman, said in a statement. “We remain focused on the incoming indicators and economic fundamentals, and we are monitoring how they will affect consumer confidence.”

Ford maintained its 2011 forecast of 13 million to 13.5 million industrywide sales of vehicles, including medium- and heavy-duty trucks. “It likely will come in at the lower end,” Stoll said.

Alan Mulally, the Ford Motor Company president and chief executive, took his pitch for the electric car to late-night television just after midnight on Thursday, with an appearance on “The Late Show With David Letterman” on CBS.

Introduced by his uncharacteristically effusive host as a “hero” and the man “responsible for rescuing the Ford Motor Company from the brink of bankruptcy,” Mr. Mulally took his seat with a smile and a wave to the audience and, beyond it, the country Mr. Mulally hoped to sell on the Focus Electric, a purely electric compact car due in showrooms in 2012, according to The New York Times.

The conversation began in autobiographical cruise control, as the men swapped remembrances of early jobs bagging groceries and delivering newspapers. Mr. Mulally, at Mr. Letterman’s urging, then talked about his 37 years of experience in the aviation industry, specifically at Boeing.

“Nearly 6 billion people have traveled on the 737,” said Mr. Letterman, to the applause of the audience. After a few minutes, the perfunctory give-and-take was steered not so deftly by Mr. Letterman into the car world.

Mr. Mulally described the opportunity extended by William Clay Ford Jr., the automaker’s chairman, to lead Ford as his chance “to serve a second American global icon.” Mr. Letterman then pointed out that Ford weathered the global financial crisis without “government bailout money.” Cue a clapping audience and a beaming auto executive.

“When I joined Ford five years ago, Dave, clearly we needed to move very quickly to a different strategy,” said Mr. Mulally. “We decided together to get focused on the Ford brand and divested all the other ones.” During Mr. Mulally’s tenure, Ford sold its Jaguar-Land Rover and Volvo divisions, closed its Mercury brand and significantly divested itself of its holdings in Mazda.

Mr. Mulally sidestepped a question as to why other domestic automakers could not follow Ford’s example, before leading Mr. Letterman on a tour of the Focus Electric hatchback, which has a driving range of 80 miles, Mr. Mulally said.

Sliding behind the wheel, Mr. Letterman drove the car from one side of the stage to the other.

Mr. Mulally’s sales pitch was on target, but the shared moments of schtick were flat and felt scripted. The appearance felt like a car commercial, which is probably what it was meant to be.