UAW - American Axle strike damage mounts

A labor strike at American Axle and Manufacturing Holdings Inc. shut down three more General Motors Corp. truck plants Friday. But the most immediate pain likely will hit dozens of Michigan suppliers who make parts for GM's high-volume pickup trucks. "GM's truck program has such high volumes that this is going to cause a fair amount of grief for (small) tier two and tier three suppliers," said Jim Gillette, a supplier analyst in the Grand Rapids office of CSM Worldwide.

Although sales of full-size pickups and SUVs are falling, GM's trucks comprise "the biggest vehicle program in North America," Gillette said.

Last year, GM sold 1.28 million full-size pickups and SUVs out of total U.S. sales of 3.87 million cars and trucks.

GM spokesman Tom Wickham said truck plants in Flint; Fort Wayne, Ind.; and Oshawa, Ont. would close indefinitely at the end of the second shift.

The automaker's Pontiac truck assembly plant closed Thursday because of a lack of axles and other parts from Detroit-based American Axle. All four idled plants build the Chevrolet Silverado and GMC Sierra pickups.

The shutdowns affect about 11,140 hourly workers, including 5,295 in Michigan.

If the American Axle strike isn't settled by Monday and GM's plants remain closed, GM's workers become eligible for state unemployment benefits and United Auto Workers union supplemental pay, Wickham said.

Analysts say GM should weather a weeks-long strike because it has about a three-month supply of pickups and SUVs on dealers' lots. But buyers could see a shortage of certain model variations.

Large GM suppliers, such as Delphi Corp., ArvinMeritor Inc. and International Auto Components Group, which is made up of former Lear Corp. operations, could take a big financial hit from the truck production interruptions within several weeks, said Erich Merkle, an auto industry analyst at IRN Inc. in Grand Rapids.

"The supply base is in a weakened state," Merkle said. "This could be a recipe for disaster."

About 3,650 UAW workers struck American Axle's five U.S. plants, including those in Detroit and Three Rivers, on Tuesday.

UAW President Ron Gettelfinger said American Axle wants to cut wages to as little as $14 an hour from about $28 an hour and eliminate retiree health care and defined-benefit pensions for active workers.

American Axle said it needs steep cuts in hourly labor costs to compete with companies such as Dana Corp. and Delphi that reduced wages and benefits through bankruptcy proceedings.


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