3/8/08

UAW-American Axle strike shuts 29 GM plants

As negotiations between American Axle & Manufacturing Holdings Inc. and the United Auto Workers union spill into the weekend, it's increasingly likely General Motors Corp. will need to step in to end the 11-day long strike, industry watchers say. GM, American Axle's largest customer, is poised to idle or partially shutdown 29 factories Monday - a move that impacts nearly half of its hourly manufacturing work force.

Despite the massive disruption to its operations, GM has at least publicly stayed on the sidelines of the dispute. That's likely to change as the strike drags into a third week, said Erich Merkle, automotive analyst at IRN Inc.

The growing number of plants down "increases the urgency to get something done," he said. "Eventually GM will have to jump in and mediate the situation; and when GM mediates, they have to bring their pocket book."

It's likely that GM will financially assist American Axle in paying for buyouts and bonuses to workers, Merkle said.

The UAW and American Axle were to resume negotiations at 9 a.m. today, said company spokeswoman Renee Rogers.

American Axle is seeking deep cuts in wages and benefits to make salaries competitive with its domestic counterparts. A source close to the negotiations said American Axle is seeking to slash hourly wages for production workers from $28.15 to $14.50 and cut 1,000 plant jobs. The Detroit-based company also is offering workers $80,000 to $110,000 buyout packages.

The UAW has said it hasn't seen financial data to back up the company's proposed wage cuts, which the union contends are based on what other companies pay and not American Axle's cost structure or profitability.

As talks continue, GM announced more factory closures Friday, including partial shutdowns of Willow Run Transmission, Ypsilanti Transmission, Flint Stamping and Grand Rapids Stamping starting Monday.

Not all workers at the plants will be laid off, but those who are will get most of their pay and benefits under their GM contract.

A stockpile of the trucks for which American Axle supplies parts, has allowed GM to weather the strike well, so far. Merkle said it was likely that at least some of the assembly and component plants would have to temporarily shut in the near future, even without a strike, so demand could catch up with supply.

Some on the picket lines are becoming frustrated with what they hear from the talks.

American Axle worker Robyn Hudgins said its "a slap in the face" that management is asking workers to accept lower wages while not even talking about committing to future work at the plant. She and other strikers are also frustrated that union leaders have said they are open to wage buydown bonuses -- which ultimately results in lower pay.

"It's maddening," she said. "I don't understand why we are talking about buydowns for a company that made $37 million last year. GM, Ford, Chrysler workers all got to maintain their wages, and those companies lost billions."

(detnews.com)

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