GM Gets New $6 Billion Credit Line as UAW Strike Costs $200 Million

DETROIT – General Motors secured a new $6 billion line of credit as the automaker prepares for additional strikes by the United Auto Workers union.

“The line of credit that we announced today is a $6 billion line of credit that I think is prudent in light of some of the messages we’ve seen from some UAW leaders that they intend to drag this out for months,” the director said. financier Paul. Jacobson told CNBC’s Phil LeBeau in an interview on “Halftime Report.”

Selective strikes have already cost the automaker $200 million during the third quarter, GM said Wednesday.

A GM spokesperson said the $200 million cost of the strike is due to the loss of wholesale volume production, largely due to the initial UAW strike on Sept. 15 at GM’s midsize truck and full-size truck plant. in Wentzville, Missouri. The strike has since spread to GM parts and distribution facilities across the country and, as of last Friday, to a crossover vehicle plant in central Michigan.

As a result of the strike in Missouri, GM also shut down its Fairfax Assembly Plant in Kansas, where it builds the Cadillac XT4 SUV and the Chevrolet Malibu sedan, and laid off nearly 2,000 workers.

Both GM CEO Mary Barra and Ford engine CEO Jim Farley has publicly criticized UAW President Shawn Fain and the union’s strike strategy, alleging that Fain isn’t actually interested in reaching agreements for 146,000 workers with GM, Ford and Chrysler’s parent company. . stellantis.

Members of United Auto Workers (UAW) Local 230 and their supporters walk on the picket line in front of Chrysler’s Corporate Parts Division in Ontario, California, on September 26, 2023, to show solidarity with the “Big Three” auto workers currently on strike. .

Patricio T. Fallon | AFP | fake images

“It is clear that there is no real intention to reach an agreement,” Barra said in an emailed statement late Friday. “It’s clear that Shawn Fain wants to make history for himself, but he cannot be at the detriment of our represented team members and the industry.”

Fain has consistently said the union is available to negotiate 24/7, and in turn has accused the automakers of moving slowly in negotiations.

GM’s recently announced credit facility will require the automaker to maintain at least $4 billion in global liquidity and $2 billion in U.S. liquidity. The terms of the credit agreement also restrict GM from carrying out mergers or asset sales and limit other new debt.

It comes more than a month after Ford obtained a $4 billion line of credit to help it manage “uncertainties” in the market.

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