General Motors Company (NYSE:GM) has secured a $6 billion line of credit 20 days into the United Auto Workers union strike, according to a filing with the Securities and Exchange Commission.
The automaker entered a 364-day revolving credit agreement with JPMorgan Chase to secure the line.
The move comes as GM also said Wednesday that the strike cost it $200 million during the third quarter due to lost production. It also is a means of signaling that the company is bracing for a long-term strike.
“The facility that we announced today is a $6 billion line of credit that I think is prudent in light of some of the messages that we’ve seen from some of the UAW leadership that they intend to drag this on for months,” CFO Paul Jacobson told CNBC in an interview.
The line of credit will require GM to maintain at least $ billion in global liquidity and $2 billion in US liquidity. The agreement also bars GM from mergers or sales of assets and sets limits on new debt. GM’s liquidity was $38.9 billion as of June 30.
The UAW strike has targeted specific plants operated by each of the big three automakers, also including Ford Motor Company (NYSE:F) and Stellantis NV (NYSE:STLA, EPA:STLA). The union began striking GM’s midsize truck and full-size van plant in Wentzville, Missouri on September 15, tacked on additional parts and distribution facilities nationwide a week later, and on Friday added a crossover plant in Michigan.
On September 20, GM halted production at an assembly plant in Fairfax, Kansas, blaming a “shortage of critical stampings” it says would have been supplied by its plant.
GM CEO Mary Barra has criticized UAW President Shawn Fain, alleging he isn’t interested in getting a deal done.
“It’s clear that there is no real intent to get to an agreement,” Barra said in an emailed statement Friday. “It is clear Shawn Fain wants to make history for himself, but it can’t be to the detriment of our represented team members and the industry.”
Ford, for its part, obtained a $4 billion line of credit in August, prior to the strike.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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