General Motors announced this week that its new contracts with the United Auto Workers and Canadian auto union Unifor will cost the company upward of $9.3 billion during the length of the deals.
In their Wednesday business update, GM told investors and customers that the contracts, which included massive pay and benefit increases for its workers, would cost the company significantly. The car giant also reinstated its 2023 business guidance and announced a $10 accelerated stock buyback.
Additionally, GM released its estimate for how much the UAW strike cost the firm. According to the Wednesday announcement, GM estimates that the strikes, which began in September and ended late last month, cost the company around $1.1 billion, with bonuses and other benefit increases likely costing the company an additional $200 million before the end of the year.
Both the $9.3 billion in future costs and the $1.1 billion in strike costs will be passed to the consumer, GM announced. As part of the Wednesday update, the carmaker said it expects the price of its average vehicle to rise by about $500 next year.
GM is the first of the big three automakers besides Ford and Stellantis to announce its future expectations following the ratification of the UAW contracts at all three companies.
The companies will probably experience a difficult adjustment period for the first few years of the contracts. The pacts, which are set to expire in April 2028, provide at least 25% pay increases for workers and significant improvements to benefits and working conditions.
Ford and Jeep manufacturer Stellantis have yet to announce their predictions or how much the strikes cost them. However, both have instituted cost-cutting measures, insinuating that the strike may have hurt them significantly.
Ford recently announced a halt on a $12 billion investment in electric vehicle production, and Stellantis unveiled employee buyouts for veteran workers.
