SACRAMENTO, Calif. — After being out on the picket lines for weeks against the big three carmakers in the U.S., the United Auto Workers Union has now reached a tentative deal with General Motors.
This comes after Ford and Stellantis — the maker of Chrysler vehicles — also struck agreements with the union last week.
While this is good news for those on the picket line, a Northern California economics expert said it comes at a cost to shoppers.
"The consumer is just stuck in the middle of watching the show between corporate America and the unions," said Sanjay Varshney, with Goldenstone Wealth Management. "So, unfortunately, it was not about the consumer this time."
ABC News confirmed all three tentative deals include a 25% raise for workers over four years, plus cost of living adjustments. The Ford and Stellantis agreements also call for more paid time off, significant improvements in pensions and guarantees to keep certain factories open.
However, these changes will likely mean higher car prices for consumers and not just for cars.
"That's inflationary," said Varshney. "The consumers are going to pay a higher price from the household budgets. And once again, that's going to basically take away from something else that they would have spent money."
The tentative deals give less than what UAW members wanted. They had been calling for a 40% wage increase over the next four years. A figure the UAW said matches what the CEOs of the companies earned.
"This is going to really escalate the cost structure for these three companies that have struggled to be profitable," said Varshney.
But still, the union calls the tentative deals a win.
"We fought like hell and we won like never before," said Chuck Browning, UAW vice president. "We say this is a record contract, we mean it."
Meanwhile, the strike did have a ripple effect as the big three automakers laid off workers at several plants, and the wins may be short-lived.
"Big win for the workers who work through a UAW, who are members of UAW. In the long run, will this cause more displacement of labor and will this cause more layoffs (and) will these companies become less profitable and therefore they will basically employ fewer people going forward, possibly," said Varshney.
The deals are tentative. All UAW members still need to vote and ratify the contracts before they become official.
