General Motors Co. is setting up a $6 billion line of credit to shore up liquidity, a move indicating the carmaker is preparing for a strike at US plants that may drag on with costs already reaching $200 million.
(Bloomberg) — General Motors Co. is setting up a $6 billion line of credit to shore up liquidity, a move indicating the carmaker is preparing for a strike at US plants that may drag on with costs already reaching $200 million.
The Detroit-based company’s move to bolster its financial position was announced in a securities filing early Wednesday. GM wants the 364-day revolving credit line, which will mature on Oct. 1 next year, to maintain operational flexibility, a company spokesperson said.
As of June 30, GM’s total automotive liquidity stood at $38.9 billion, so it’s not at risk of running out of money anytime soon. But the new credit line is a sign GM may be buckling in for a prolonged work stoppage by the United Auto Workers.
The company has been exchanging offers with the UAW, but its facilities have been targeted for escalating union member walk-outs.
The strike shutdown a GM plant in Lansing, Michigan, last week that makes the Chevrolet Traverse and Buick Enclave crossover SUV models and also silenced a Missouri plant on Sept. 15 that builds the company’s Chevy Colorado and GMC Canyon mid-size picks.
Sales of those two truck models fell at least 10% in the latest quarter and the spokesperson said the strike has cost GM $200 million as of last month.
The UAW strike action also is impacting plants operated by GM rivals Ford Motor Co. and Stellantis NV.
(Updates with maturity detail in second paragraph. An earlier version of the story corrected the timeline in the sixth paragraph.)
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