PONTIAC, Mich. (WXYZ) — Auto analysts say General Motors appears to be preparing for the impacts of a long strike.
This was after the company entered into a new 364-Day Revolving Credit Agreement with JPMorgan Chase Bank. The credit agreement allows GM to have access to a $6 billion credit line. The SEC filing can be found here.
Auto analysts say automakers have done this in past strikes and often use the money as a safety net should the strike begin to impact revenue.
"The auto industry is very cash flow oriented: money comes in and money goes out to keep things running. What GM is looking to do is to make sure they have the liquidity to go forward if they start to see sales impacted from the strike and therefore revenue as well," said David Zoia with Wards Auto. "They want to make sure they have the cash on hand to borrow money to keep the operations going."
Ford Motor Company took similar action, opening a $4 billion line of credit back in August.
Zoia says while the money is a safety net for automakers, it could also mean a longer road to travel for workers who are on the picket line currently.
"I think just in general as a worker you have to be concerned about how long this is going to go on. So I think for all of them, in a typical negotiation, you almost have to reach a pain point on both sides before a settlement really happens," said Zoia.
Wednesday, workers on the picket line walked back and forth near GM's Customer Care and Aftersales facility in Pontiac.
"It was never our intention to strike any more than it was to sit there and pretend like we don’t have the right to recover some of the concessions we made back during the bankruptcy," said Vern Armstead who has been with GM for 45 years. "Traditionally in years gone by, we’ve shot for little and took even less and it’s never going to improve unless we dig in to get a fair and equitable contract."
Workers say while they'd like to be back to work as soon as possible, they're not sure the two sides will be able to reach a deal soon.
"Think it’s going to be a long ride because there’s greed everywhere," said Jeffery Sharpe who has also worked for GM for 45 years. "It’s on our backs. I don’t think anyone is asking for anything out of line. We want to be able to raise a family. Simple as that."
If the GM doesn’t access the credit line before this date next year, the credit line will expire.
