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Illustration: Sarah Grillo/Axios

Detroit automakers are facing technological disruption, whipsawing government policies and economic uncertainty.

Driving the news: Just-completed labor contracts between Detroit automakers and the United Auto Workers union yielded $22.7 billion in planned investment in U.S. factories over the next four years, adding or securing 25,400 jobs.

  • Instead of pulling on the reins, they are pouring money into their American manufacturing operations.

Why it matters: The spending commitments provide a measure of stability for American auto workers in a rapidly transforming industry, while also giving President Trump something to boast about in industrial swing states.

  • "Every time a car plant opens in Michigan, think of Trump!" the president told supporters at a rally in Grand Rapids on Wednesday.

There's only one new car plant going up in Michigan, but the state and its workers are undoubtedly the big winners from the latest round of labor bargaining.

  • About $15 billion, or two-thirds of the overall commitment from GM, Ford and FCA, is earmarked for Michigan, says the Center for Automotive Research.
  • The rest is sprinkled across the Midwest to revamp factories in Illinois, Indiana, Kentucky, Missouri and Ohio.

Two big factors — technology and trade — are driving the increased investments.

  • Electric vehicles require new equipment and processes, which means some plants must be gutted.
  • Carmakers also need to bolster their U.S. manufacturing footprint to ensure compliance with the new U.S.-Mexico-Canada trade agreement, passed by the House on Thursday and likely to be taken up by the Senate in January.
"You've got to put a lot of money on the table right now."
— Kristin Dziczek, CAR's vice president of research

Between the lines: The USMCA, which replaces the 25-year-old North American Free Trade Agreement, allows current trade flow to continue but sets stricter rules — and in turn higher costs — for parts and labor rates. For automakers to avoid tariffs:

  • 75% of light vehicles and core components like engines and transmissions must be sourced in North America, up from 62.5% under NAFTA.
  • 40% of passenger vehicle components (and 45% of pickup trucks) must be made by workers earning at least $16 per hour — almost four times what the typical Mexican autoworker earns.

How it's playing out: With ratification complete, companies are beginning to disclose details about where the money's going.

  • Ford will invest more than $1.45 billion in two Michigan plants and add 3,000 new jobs.
  • GM will spend $3 billion and create 2,225 new jobs to produce electric pickups and vans at a plant in Detroit.
  • Fiat Chrysler Automobiles will spend $4.5 billion, on top of $4.5 billion previously announced, to expand factories, adding up to 6,750 new jobs.

The bottom line: In an unsettled environment, the business risks are high, but automakers have no choice but to keep investing if they want to stay in the game.

Go deeper:

Go deeper

Americans are super-sizing their holiday travel

Illustration: Sarah Grillo/Axios

Americans are rushing back into holiday travel, and many are taking even longer trips now than they did before the pandemic began.

The big picture: After skipping Thanksgiving and Christmas gatherings last year, many people are eager to maximize this year's celebrations with friends and family. And flexible remote working arrangements make that easier than ever.

Updated 17 hours ago - Sports

The potential GOAT of chess faces intriguing challenger

Illustration: Sarah Grillo/Axios

The World Chess Championship between Norway's Magnus Carlsen and Russia's Ian Nepomniachtchi began on Friday, 1,094 days after Carlsen won his fourth consecutive title.

Why it matters: During the long, COVID-fueled layoff, chess entered a new era, and with the championship finally here, the age-old game is ready for its close-up.

Department of Interior proposes raising cost of drilling on public lands

A horizontal drilling rig and a pump jack sit on federal land in Lea County, New Mexico. Photo: Callaghan O'Hare/Bloomberg via Getty Images

Oil and gas companies should pay more to drill on federal lands and waters, the Department of the Interior argued in a report released Friday, saying that the current rates were "outdated."

Driving the news: The Department of Interior report said that the federal government's oil and gas leasing and permitting program "fails to provide a fair return to taxpayers, even before factoring in the resulting climate-related costs that must be borne by taxpayers."