GM: UAW strike cost US$200 million in first two weeks

General Motors Co. said the historic United Auto Workers union strike has already cost $200 million in the first two weeks, prompting the company to seek credit as it braces for more losses.

On Sept. 15, the union walked out of a Missouri plant that makes the company’s Chevy Colorado and GMC Canyon midsize trucks. Sales of those two vehicles fell at least 10% in the quarter, according to GM. A week later, the strike expanded to include all GM and Stellantis NV parts distribution facilities in the United States.

The strike last week impacted a third assembly plant in Lansing, Michigan, halting production of the Chevrolet Traverse and Buick Enclave crossover sport utility vehicle models.

GM announced Wednesday that it established a $6 billion line of credit to shore up liquidity, a sign that it is preparing for a prolonged work stoppage.

While negotiations with the UAW continue, GM is the only one of Detroit’s three traditional automakers that has been the target of every strike by the union in each of the past two weeks. Stellantis and Ford Motor Co. “have saved” each once, which the union said was due to progress in contract negotiations.

GM’s total automotive liquidity was $38.9 billion as of June 30, so it is not at risk of running out of funds in the short term. The Detroit-based company wants the 364-day revolving credit line, which will expire Oct. 1 of next year, to maintain operational flexibility, according to a spokesperson.

Joel Levington, a credit analyst at Bloomberg Intelligence, said GM’s new credit line “It is a prudent effort to strengthen its already significant financial flexibility”. He also noted that Ford secured $4 billion in commitments from its lenders in August.