Strikes would imperil bailout funding
The provision is buried deep in the Loan and Security Agreement between GM and the U.S. Treasury Department governing the use of up to $13.4 billion in short-term loans that prevented the automaker's collapse, according to documents filed Wednesday with the U.S. Securities and Exchange Commission. Other events that would trigger a default include failing to make a payment on time or voluntarily filing bankruptcy.
The strike disclosure comes as GM continues talks with the UAW to pursue concessions that would help transform the automaker into a smaller, viable company. While the UAW is not a party to the loan agreement, the union would endanger GM's survival by waging a strike, a tactic it used last year against American Axle & Manufacturing Holdings Inc. and in 2007 against GM and Chrysler before reaching landmark labor deals.
"I can't see that a strike would serve any benefit right now," said analyst Aaron Bragman of IHS Global Insight. "It sounds like maybe some Republican union-busting language got in there, which would not surprise me."