Ongoing Strike Might Hamper The Credit Ratings Of General Motors

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.

David Sandefur

David Sandefur has gained a lot of experience in business and market analysis. He is one of the top assets for Chemical Industry Reports news portal. He is assigned with the title of “Gem” owing to his efficient way of managing the allotted responsibilities. He is competent in expressing terminologies and concepts related to business, finance, market, and industries. He had worked as a business analyst in the production industry for almost 4 Years with a total experience of 7 Years. These qualities and experience have served him the role of leading the columnists’ team at Chemical Industry Reports news portal. He has accomplished his Master’s degree in Accounts.

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