DETROIT (WWJ) - General Motors Co. secured a $6 billion line of credit to shore up liquidity in a move that indicates the automaker is preparing for a prolonged United Auto Workers strike.
A spokesperson for the Detroit automaker said the strike, which began on Sept. 15, has so far cost the company $200 million.
In a securities filing early Wednesday reported by Bloomberg, General Motors is seeking a 364-day revolving credit line with 21 banks led by JPMorgan Chase & Co. and Citigroup Inc.'s (C) Citibank N.A. to maintain operational flexibility and "bolster its financial position."
While the company stood at a total automotive liquidity of just under $39 billion as of June 30, the new line of credit could be a sign that GM is gearing up for a long-term fallout from the ongoing UAW strike -- and the company is making sure they will have plenty of money on hand.
The facility requires that GM maintain at least $4 billion in global liquidity and at least $2 billion in U.S. liquidity. During premarket trading on Wednesday, GM's stock was up 0.5%, Morningstar reported.
Best Stocks added that the agreement provides GM with a major amount of financial flexibility and "access to capital to support their ongoing operations and strategic initiatives."
So far, the strike has forced the closure of GM's Lansing Delta Township assembly plant, which manufactures the Chevrolet Traverse and Buick Enclave crossover SUV models. Workers at GM's Missouri plant took to the picket lines on Sept. 15, causing a screeching halt to the production of Chevy Colorado and GMC Canyon mid-size pickups.
The UAW strike is also causing issues at plants belonging to Ford Motor Co. and Stellantis NV.
