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GM Bondholders Not Ready for ‘Panic’ as Strike Enters Third Week

  • Spreads likely to widen as talks drag on, analysts warn
  • Harder to recoup lost production after two weeks, S&P says
Gate three of the General Motors’ Bedford Powertrain factory is locked shut after UAW Local 440 workers joined a national labor strike against GM. The strike involving over 49,000 workers nationwide began at midnight. Over 700 work at the Bedford plant.
Gate three of the General Motors’ Bedford Powertrain factory is locked shut after UAW Local 440 workers joined a national labor strike against GM. The strike involving over 49,000 workers nationwide began at midnight. Over 700 work at the Bedford plant.Photographer: Jeremy Hogan/SOPA Images/Sipa USA/AP

General Motors Co. bonds might soon slide into reverse, analysts warn, as the company’s contract negotiations with the striking United Auto Workers union head toward their third week.

So far investors have yet to pay the risk much attention, with GM’s debt barely budging over the past two weeks, even as the company loses more than $50 million a day with workers on the picket line. But as the unrest carries on longer than expected, risk premiums are poised to rise, as does the possibility that credit raters take negative action.