General Motors (GM) has recently entered into a new and substantial revolving credit agreement worth $6 billion. This move comes as the automaker deals with the consequences of the ongoing strike initiated by the United Auto Workers (UAW) union.
The 364-day revolving credit agreement carries certain provisions that restrict potential mergers, sales of assets, and debt incurrence. In addition, GM must uphold a minimum global liquidity of $4 billion, along with a U.S. liquidity of over $2 billion.
GM, along with industry counterparts Ford Motor and Stellantis, is currently grappling with the impact of the UAW strike. Approximately 25,000 employees across the three companies have ceased operations at various facilities. The union decided to initiate work stoppages after failing to reach agreements on new four-year contracts by the September 14 deadline. To escalate pressure, the UAW has gradually expanded the scale of the strikes.
In response to the situation, both Ford and GM have been forced to lay off workers. Just recently, GM announced that it would idle 163 employees in Ohio due to the ongoing strike. The strikes have caused a ripple effect across suppliers and automakers, resulting in over 6,000 factory workers being out of work.
