Less than two years ago, the gap between the labor costs for a car made by GM versus one made by Toyota stood at a staggering $4,000. Most of the extra costs GM suffered included payments for health care, unitary wages and inefficient plants. However, with the signing of last week’s contract deal with the UAW, GM will shrunk the gap to a more reasonable $800 per vehicle.

According to Dave Cole, the Chief of the Center for Automotive Research, “GM is now reasonably close to Toyota” in terms of cost parity. The key now is how much of these savings are invested in new vehicles, reports Automotive News, because this will effect whether the new contracts are even ratified by the UAW.

Under the deal, GM has promised to contribute $35 billion to the UAW's newly created health-care fund for retirees, pay workers a bonus of $3,000 for signing the new contract, and promise to continue operations at 16 U.S. plants.

It’s expected the UAW will use a similar model when negotiating with Ford and Chrysler but the other Detroit 3 members could have trouble meeting such demands.