DETROIT – General engines has secured a new $6 billion credit line as the automaker prepares for more strikes by the United Auto Workers union.
“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 we’ve heard from some UAW leaders that they have the intention to drag this out for months,” said CFO Paul. Jacobson told CNBC’s Phil LeBeau in an interview on “Halftime Report.”
The targeted 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 lost production on wholesale volume, largely due to the initial UAW strike on September 15 in GM’s mid-size truck and full-size van 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 plant in mid-Michigan.
Following the Missouri strike, GM also closed its Fairfax assembly plant in Kansas, where it builds the Cadillac XT4 SUV and Chevrolet Malibu sedan, and laid off nearly 2,000 workers.
Mary Barra, CEO of GM, as well as Ford engine CEO Jim Farley publicly criticized UAW President Shawn Fain and the union’s strike strategy, saying Fain wasn’t actually interested in reaching deals for 146,000 workers with GM’s parent company , Ford and Chrysler. Stellantis.
Members of the United Auto Workers (UAW) Local 230 and their supporters march on the picket line in front of Chrysler’s corporate parts division in Ontario, California, September 26, 2023, to show their solidarity with the “big three” auto workers currently on strike. .
Patrick T. Fallon | AFP | Getty Images
“It is clear that there is no real intention of reaching an agreement,” Barra said in an emailed statement Friday evening. “It is clear that Shawn Fain wants to make history for himself, but it cannot come at the expense 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 slow negotiations.
GM’s recently announced credit line 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 prohibit GM from mergers or asset sales and limit other new debt. As of June 30, GM’s total automotive liquidity was $38.9 billion.
The credit line comes more than a month after Ford secured a $4 billion credit line to help it manage market “uncertainties.”