General Motors (GM) is bracing for the financial impact of the ongoing strike by the United Auto Workers (UAW) union, which has entered its third week. The automaker has set up a $1 billion credit line to cope with the cash flow disruption caused by the labor dispute1.
According to Bloomberg, GM has lost $200 million since workers walked off the job and onto the picket lines on Sept. 151. The company expects to lose another $200 million by the end of this month if the strike continues1.
The strike, which involves more than 25,000 UAW members across GM, Ford and Stellantis, is the first time in history that the union has struck all three of America’s unionized automakers at the same time2. The UAW is demanding better wages, benefits, job security and investment from the companies, which have reported record profits in recent years2.
President Joe Biden has expressed his support for the striking workers, calling on the automakers to improve their offer2. “I believe they should go further to ensure record profits mean record contracts for the UAW,” he said on Friday2.
The strike has also affected the production and supply chain of the auto industry, forcing GM to idle some of its plants and lay off some of its workers3. Ford announced it will lay off 600 workers and GM will idle about 2,000 workers starting next week3.
The UAW president Shawn Fain said he is hopeful that a deal can be reached soon, but warned that the union will expand the strike to more plants if the negotiations do not progress3. “We have been very clear about our demands and if the companies don’t come to the pump and deliver for these members and give them their fair share of economic and social justice, we’ll amp up the pressure, we’ll take more plants out,” he said3.