Earlier this month, the UAW labor union ratified its new contract with GM, officially ending a drawn-out negotiating process that lasted months and resulted in a six-week strike. The new contract includes substantial financial gains for UAW members, including wage increases, paid leave, and retirement contributions. Now, General Motors is estimating how the new UAW contract will impact vehicle production costs.
In a recent presentation, General Motors estimates that the average vehicle production cost impact of the new UAW contract will be an increase of roughly $500 per vehicle in 2024, rising to roughly $575 per vehicle through the life of the contract. To note, this cost increase is also the result of GM’s new contract with Unifor, the labor union which represents GM’s Canadian employees.
General Motors did not indicate if the increased production costs would be handed over to the consumer.
GM estimates that the six-week strike resulted in a $1.1 billion hit, while the new wage increases, signing bonus, and benefits will result in a $200 million hit through 2023. The total incremental cost of the new contract over the life of the agreement will amount to $9.3 billion, estimated at $1.5 billion in 2024, $1.8 billion in 2025, $2.1 billion in 2026, $2.5 billion in 2027, and $1.1 billion in 2028.
Highlights of the new UAW contract include a 25-percent wage increase over the life of the contract, as well as cost of living adjustments (COLA) that will increase the wage boost to 30 percent by the end of the contract. General Motors will also provide UAW members with a 3.6-percent increase in company-paid 401K retirement contributions with no employee contribution required, a $5,000 lump-sum signing bonus payable to all seniority employees and active temp employees with 90 days of service, and up to 20 paid holidays per year with two weeks of paid parental leave.
The UAW represents 46,000 General Motors workers, as well as roughly 146,000 workers across all three of the Big Detroit automakers (General Motors, Ford, and Stellantis).
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Comments
So what happened overnight to yesterday’s article saying that vehicle prices wouldn’t be affected? Huh?
That article was written by a person living in the land of no reality.
FYI if the costs go up $500 and gm is still striving for 10% profit margin, than the retail price that we pay will go up $556.
Course Mary could just keep the price the same, eliminate V8’s in trucks and make the sheet metal so thin that it dents in a car wash, oh wait……
GMA reports on what GM press releases tell them, then contradict it with real journalism that asks the questions they should have been
Don’t come here for thought provoking articles or even experienced based reviews and articles, come here to find out about new product.
Alex, you had to sense that the price of cars was going to go up (as it almost always does), despite GM trying to smooth it over with a “press release”. So why publish the article claiming no increase?
It’s typical kooky lib reporting trying everything in their power to save any bad press from the Buyden/Barra team.
Next they’ll call it a historic win for the B/B team….everything describing the Democrats is historic you know….
And now this. Make up you minds.
“Record” profits deserve a “record” contract.
Ok… Now folks are eagerly looking forward to the same “record” setting levels of build quality, reduced down-time, increased attendance, through-put and other KPi metric improvements.
Regardless of any prices because there will be some,come 2024 there will be layoffs across the board.
GM is too busy spending 10 billion on stock buy backs. Lol . “GM sees $9.3 billion hit from labor deals, outlines $10 billion stock buyback” per Reuters
GM coming out with a $10B stock buyback program less than a month after moaning and whining about UAW wage demands suggests quite strongly that the UAW was right all along – glad they stuck with it. Otherwise GM would have done a $20B stock buyback and made Mary even richer.
According to Automotive News, “Ford said the UAW’s new contract would increase labor costs by $8.8 billion, or an average of $900 per vehicle in 2028.”
500 dollars over the life of this contract is nothing when you take into consideration the actual prices of vehicles have skyrocketed by something like 30-40% since 2020.
How many times must we “blow off” another $500 or $1000 increase?
Hard to believe that the experts over at Edmunds/CNN who sourced the article we saw yesterday indicating there would be no price increases…turned out to be wrong. Edmunds/CNN logic seemed to fit the way many of us think today, that a 30% increase in labor costs shouldn’t increase vehicle prices. It is almost like when a year or so ago, my stupid state decided to put a global warming tax on the oil companies and claimed at the time that it wouldn’t increase prices at the pump…but it turned out to increase prices at the pump by 52 cents a gallon…I suppose this is all part of my state’s program to help low-income households.
No matter the dollar amount increase, it will be built into the price of the car.
UAW Contract Adjustment.
Monroni label will show CAUAW….$$$$$$
Never bought a new car or truck, never will.
Here is some perspective. They sold 521,000 silverados last year. At $500 per that’s a $260 million dollar loss. On just Silverado in just the US. Get F’n real.
Put in more robots , they don’t ask for a 32 hour week and don’t come in Monday morning all red eyed with a hangover
Unless I missed something, I don’t think that the UAW got their 32 hour workweek.
What about GM executive salaries?
What do they increase the cost of a vehicle by?
Not trying to be political or pick sides, just curious what middle level management and up to the CEO figure into the price of a vehicle.
Too many people on this board give the Great Mary a pass on this…
A pass ,how about a pink slip ?
What is the cost per vehicle of GM’s $10 billion stock buyback that was announced 11/30?
That’s a very good question.
$500 per vehicle for all hourly is quite minimal as compared to Mary Barra’s (obscenely unearned) $30 million salary over 6 million cars is $5 per car.
Also these f-ing new pop up adds on GM authority are annoying.
Window sticker should include price increases from UAW contracts. That way customers can see upfront the cost of union bull$hit.
Well then they should include executive raises and perks. Stock options, country club memberships, value of company cars, how much is spent on air travel and hotels and so on and so on. BTW, the companies don’t pay anything to the Unions. The UAW membership pays dues to the Union to negotiate a collective bargaining agreement with the employer on their behalf.
With all due respect. This is a bunch of bs. Labor cost could go from 5%-10% of business cost and GM would still make billions. Any propaganda is good propaganda to keep more piece of the pie from the workers.