Moody’s in its statement has said that the recent strike that GM has had to go through is a credit-negative for the automaker, as it increases the chances that Moody may downgrade the credit rating of GM. This is a bigger incentive for GM to quickly sort the strike out and make huge amounts of concessions.
Moody is warning the company that in case the strike does not end in the upcoming one or two weeks, the financial impact that a strike has will be becoming more visible and the possibilities of a deal which makes sure that the erosion of the competitive position is not likely to happen
In simplicity, it implies that if the UAW and GM cannot end the strike quicker and force major concessions, there will be consequences on the Wall Street as it will be punishing the automaker by making the borrowing of money for the company more expensive and its stock value will be lowering.
It is evident that the workers of GM who have been on strike and have not been confronting the entire class of capitalists let alone the CEO of GM and the other executives. The investors of GM on the Wall Street demand that the auto giant does everything it can to ensure that there is a high rate of profit in the otherwise falling auto industry
This is in spite of a decade if almost record levels of profits in the auto industry which has been producing a lot of money for the wealth of the investors of GM.
These profits have usually not been used in the new production and instead have been wasted on the buyback of stocks.