And so it ends -- not with a bang, but a whimper.

On Oct. 30, General Motors (GM 0.48%) reached a tentative agreement with the United Auto Workers (UAW) to end the labor union's six-week-long targeted strike at its factories.

Ford Motor Company (F -1.92%) and Stellantis (STLA 0.57%) had already come to their own deals with the union, leaving GM as the last of the Big Three automakers needing to forge an agreement.

As of now, Ford, Stellantis, and GM have all agreed to historic deals that award workers bigger pay raises during the next four years than they've received in the past two decades combined.

What did the workers get?

The UAW's members still need to ratify the contracts, a process that could take a few weeks to wrap up. But assuming that happens, over the next four years, those auto workers can expect to receive a total increase of 25% in their maximum hourly wage. Additionally, the time required to rise from entry-level wages to the top level will shrink to just three years.

Improved retirement benefits (including an extra $2,500 in payments to current retirees and their spouses) and the UAW's right to call a strike if GM attempts to close down a plant are also included in the agreement.

What does it mean for GM investors?

The majority of General Motors workers can now expect to earn more than $40 an hour, Chief Executive Officer Mary Barra said on the Q3 earnings conference call on Oct. 24 -- and that's just for starters. Counting benefits, analysts say GM's total labor costs could approach $90 an hour per worker.

So what does this mean for investors in GM stock?

Well, the strike itself cost GM roughly $200 million in Q3, and probably $800 million more through the end of October -- a $1 billion hit in total. But that's just the start of the bad news.

Ford Chief Financial Officer John Lawler recently suggested that the new UAW contract will add $850 to $900 in labor costs to each vehicle Ford builds. GM hasn't yet quantified its costs in this manner, but with wages and benefits looking similar across the Big Three, chances are that GM will take a similar hit.

So how much of a bite will this take out of GM's profits?

Through the end of Q3, GM reported 1.97 million car and truck sales, putting the company on track for perhaps 2.63 million sales for the year. Multiply that by $900 in additional labor costs per vehicle, and the implication is that GM's annual labor costs could rise by as much as $2.37 billion per year.

(This assumes constant sales. Should GM's sales grow -- they were up 21% in September for example -- costs would rise in tandem).

What will that mean for GM's profit margins?

That additional $2.36 billion in spending on UAW workers, divided by GM's $172 billion in trailing 12-month revenue, implies that GM could theoretically see as much as a 1.4 percentage point narrowing in its net profit margin.

Currently, GM's net margin is a respectable 5.8%, which gives the company some breathing room -- but not a lot. Subtract the additional labor costs, and GM's net margin could contract to just 4.4% -- its lowest level of profitability in the past six years. Moreover, a narrowing of that magnitude would translate to close to a 24% decline in per-share profit.

To put that in terms of dollars and cents, such a decline would be enough to shrink the $6.13 per share profit that GM netted last year, to just $4.66 per share.

That's the good news.

The bad news is that GM's profit margins were already narrowing before the UAW strike. Factor in higher labor costs from the UAW agreement, and this slide in profit margins is almost certain to continue, resulting in a significant decrease in GM's profitability. For context, analysts were already predicting that per-share profit at GM would fall by 10% from 2023 through 2027, which includes the final year of the new labor agreement. Counting the effects of the contract, I'd expect the decline to be at least two to three times that big.

Granted, at a price-to-earnings ratio of about 4, GM stock looks incredibly cheap right now -- but it's cheap for a reason because its profit is much more likely to go down than up from here. As the effects of this wage increase become more apparent to investors, it may be time to think about selling GM stock.