GM revealed on Wednesday in a business update that it expects its new UAW and Canadian Unifor labor contracts will increase costs by $9.3 billion through 2028. The company has also announced $10 billion in stock buybacks, as well as a 33-percent increase in its stock dividends.
The numbers come following a new UAW contract, ratified earlier in November with a 54.7-percent majority vote. It includes a 25-percent pay increase and future job security for union workers in the shift to electric vehicle production. The extra cost translates to about $575 per vehicle over the contract, which is set to expire in 2028.
GM on Wednesday said the roughly six-week UAW strike impacted its business to the tune of an estimated $1.1 billion in earnings before interest and tax.
"We are finalizing a 2024 budget that will fully offset the incremental costs of our new labor agreements and the long-term plan we are executing includes reducing the capital intensity of the business, developing products even more efficiently, and further reducing our fixed and variable costs," CEO Mary Barra said in a statement. "With this clear path forward, and our strong balance sheet, we will return significant capital to shareholders."
The American automaker plans to immediately repurchase and retire $6.8 billion worth of its common stock in a $10 billion buyback program announced Wednesday. The remainder of the buybacks will occur through 2024.
GM also announced a 33-percent increase to its common stock dividend, from nine cents per quarter to 12 center per quarter. The bump is expected to take effect at the start of 2024.
