How long will the automotive industry strike last? General Motors has secured a loan "recharge" of $6 billion in advance.

To prevent the prolonged strike that has swept through dozens of factories across the United States, General Motors (GM) has preloaded its "credit card".

On Wednesday, October 4th, Eastern Time, GM announced that it has obtained an additional $6 billion in credit lines to strengthen its liquidity. To secure these credit lines, GM is required to maintain at least $4 billion in global liquidity and at least $2 billion in liquidity in the United States. At the same time, GM's merger and asset sale activities are restricted.

GM's CFO, Paul Jacobson, stated that some leaders of the United Auto Workers (UAW) have signaled their intention to prolong the strike for several months. In light of this, he believes that obtaining a $6 billion loan facility is a prudent move.

Also on Wednesday, GM disclosed that the targeted strike by the UAW has cost the company $200 million in the third quarter of this year.

According to a GM spokesperson, the $200 million strike cost is due to production losses in wholesale vehicle sales, primarily resulting from the UAW strike at GM's medium-duty truck and various van factories in Wentzville, Missouri last month.

As of June 30th, GM's total automotive liquidity was $38.9 billion, with no immediate risk of running out of funds. The company hopes to maintain operational flexibility through a revolving credit facility with a term of 364 days, which expires on October 1st of next year.

The media generally believes that the new credit lines reflect GM's preparation for a long-term shutdown and further losses in the future.

Prior to GM's move, Ford, another giant facing the threat of a prolonged UAW strike, announced more than a month ago that it had obtained a $4 billion credit facility on August 17th to help manage market uncertainty.

Wall Street CN previously mentioned that on September 15th, the UAW launched strikes against GM, Ford, and Stellantis. This was the first time in UAW history that strikes were simultaneously launched against the three major automakers, and it was also one of the strongest strike waves in the United States in recent years. The initial strikes affected three factories, accounting for 9% of North American automotive production, with approximately 13,000 workers participating.

On September 22nd, due to the lack of progress in negotiations, the UAW announced an escalation of the strike, adding 38 more factories owned by GM and Stellantis. Last Friday, the UAW further expanded the scale of the strike, involving more assembly plants of Ford and GM. According to media reports on Tuesday, there are currently 25,200 workers on strike, accounting for only 17% of the UAW contract members of the three major automakers.

Sales data released on Tuesday showed that several major automakers recorded strong double-digit growth in new car sales in the United States in the third quarter, unaffected by the strike. Among them, General Motors' sales increased by 21% year-on-year. Industry insiders expect this sales momentum to continue until the end of the year.

However, Jonathan Smoke, Chief Economist at automotive research firm Cox Automotive, believes that the impact of the strike may begin to show in October for some models under General Motors, such as the Chevrolet Colorado and GMC Canyon midsize pickups, as the workers' strike has already affected production.

In a blog post last Friday, Smoke stated, "So far, the impact of the strike has been relatively minor. If the strike at the production facilities expands further, the products most likely to be affected are Chevrolet and Cadillac's large SUVs, which have tighter inventory compared to their domestic competitors."