A new auto industry forecast by Fitch Ratings, an automobile market analysis firm, predicts that a slow recovery for the economy and resulting slow turnaround for the auto industry may prevent GM and Chrysler from making an initial public offering of stock in the newly restructured auto companies. The Detroit News reports:

“Factors precluding a stronger bounce from trough levels include high unemployment, pressured consumer discretionary spending, the lost wealth effect from lower housing prices and a higher savings rate,” analyst Mark Oline said in the release, adding fleet sales also will feel the pressure of weak demand from car rental companies and municipalities with tight budgets.

The drawn-out recovery “would leave much of the industry awash in negative cash flow in 2010,” Oline predicts.

“A muted industry recovery indicates that in Fitch’s view, neither General Motors nor Chrysler will be in a position to access the equity markets in 2010.”

GM had hoped to make an initial stock offering in mid-2010 but recently revised that to late 2010. If the Fitch predictions are correct, the company may go public even later than that. Once the stock goes public, the federal government can begin to slowly sell off its equity stake in the company and allow it to be truly privately owned once again.