General Motors Gets New Credit Line

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General Motors Gets New Credit Line

General Motors (GM) Gets $6 Billion Worth Of Credit Line

On Wednesday, General Motors (GM) successfully managed to get a new line of credit worth about $6 billion. The automaker has already estimated that it will lose around $200 million from the strike of United Auto Workers.

The strike by the factory workers started on 15th September and has been going on for almost 20 days. Overall, the strike has already affected up to 2 assembly plants of General Motors and around 20 centers of 'parts distribution.'

However, that's not the end of it, as there's always a chance that the UAW may extend its strike to cover more factories of the GM. For now, the negotiations are underway, and there's always a chance of this process getting stalled. In that case, the situation will escalate, and the GM will have to experience more losses.

GM Faces Multiple Headwinds

In the midst of all of this, the GM has successfully managed to get a line of credit worth multi-billion dollars. It will be valid till October 2024 and will allow the GM to tap into liquidity.

With this line of credit, General Motors plans to protect and improve its balance sheet as it suffers financial losses from the worker's strike. If the strike spreads to other plants, it may even halt the production of pickup trucks & other profitable vehicles of the GM.

Under the liquidity deal, GM will have to ensure that it has at least $2 billion in liquidity in the USA and a global liquidity of $4 billion. In addition, the agreement will also limit the GM's ability to sell or merge its assets as well as the ability to get new debt.

To say that GM is feeling the heat from the workers' strike would be an understatement, as the company had to resort to securing an additional line of credit. For now, it remains to be seen when the strike will officially end, and GM will get back into business as usual.

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