GM revealed in a business update that its new UAW and Canadian Unifor labor contracts will increase costs by $9.3 billion through 2028. Alongside this, the company announced $10 billion in stock buybacks and a 33% increase in stock dividends.

The new UAW contract, ratified in November with a 54.7% vote, includes a 25% pay increase and job security for union workers in the shift to electric vehicle production. This additional cost equates to about $575 per vehicle over the contract period, which expires in 2028.

The six-week UAW strike had an estimated $1.1 billion impact on GM’s earnings before interest and tax.

CEO Mary Barra stated that they are finalizing a budget to offset the incremental costs of the new labor agreements and are working on reducing the capital intensity of the business, developing products more efficiently, and further lowering fixed and variable costs. With a clear path forward and a strong balance sheet, the company aims to return significant capital to shareholders.

In a $10 billion buyback program announced on Wednesday, GM plans to repurchase and retire $6.8 billion worth of its common stock immediately, with the remainder to be bought back through 2024.

Additionally, GM announced a 33% increase in its common stock dividend, from nine cents per quarter to 12 cents per quarter, expected to take effect at the start of 2024.