5/2/08

UAW-AAM strike, week 10

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For UAW stories, click: here.

Striking workers at American Axle & Manufacturing Holdings Inc., on the picket lines since February, likely will have to wait longer to go back to work. A deal between the Detroit-based parts supplier and the United Auto Workers union is beginning to take shape, but a resolution is not imminent, sources familiar with the negotiations said Thursday. Hopes were high among workers and on Wall Street that the labor conflict will soon end, as details of a potential deal surfaced. Part of the plan would be to close American Axle forge operations in Detroit and Tonawanda, N.Y.

About 300 people work at the forge operations in Detroit.

American Axle's stock price shot up $2.57, or 13 percent, on the news. Shares closed at $22.71.

The latest offer from American Axle to the UAW calls for wage cuts for production workers from about $28 per hour to $17.

UAW Local 235 President Adrian King confirmed the numbers and said the union is evaluating the proposal.

American Axle spokeswoman Renee Rogers said Thursday talks are moving forward, but she would not comment on specifics.

"We've made good progress," she said.

Workers at five American Axle plants in Michigan and New York have been on strike since Feb. 26.

Talks were held up Thursday by officer elections at UAW Local 235, which kept key negotiators away from the bargaining table. In the vote, King lost the president post to local Vice President Bill Alford Jr.

The buzz around a potential agreement came as General Motors Corp., American Axle's largest customer, reported a 16 percent U.S. sales decline for April that included 15,000 lost fleet vehicle sales as a result of the strike.

That lost sales cost GM about 1.5 points of market share, Mike DiGiovanni, GM's sales analyst, said. GM's fleet sales are down 30 percent more than the automaker planned for the year because of the parts shortage created by the walkout, he said. More than two dozen of GM's North American factories are either idled or partially shut down due to the strike.

GM said earlier this week that the dispute cost the company $800 million in the first quarter. The automaker also lost 100,000 units of production, though many analysts say a cut would have been necessary anyway because of sluggish U.S. auto sales.

Axle primarily produces parts for GM's slow-selling full-size trucks and SUVs, though some passenger car production also has been affected.

The automaker this week announced plans to produce 140,000 fewer trucks and SUVs in the year's second half because of weak demand, a cut that's bound to trickle down to American Axle.

Wendy Thompson, a former president of American Axle's Local 235, said the company's is using GM's production cuts to further its case for closing the Detroit and New York factories.

(detnews.com)

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