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American Axle Resuming Operations

May 26, 2008
Two forging plants to close under four-year contract

American Axle and Manufacturing confirmed in a news release that the four-year contract agreed to with the United Autoworkers union earlier this month has been ratified by about 3,650 workers at its five manufacturing plants. The workers struck the plants in Michigan and New York March 1, launching a 12-week stoppage that idled the operations and led to supply problems that also shut down numerous General Motors plants.

The American Axle plants are expected to resume production this week; several GM plants have already returned to operation.

The UAW stated 78% of the workers at the plants approved the new contract, which will lead to American Axle closing forging operations in Detroit and Tonawanda, NY. "Our members have had to make some tough decisions for themselves and their families and have done so with careful deliberation," stated the union’s president, Ron Gettelfinger.

American Axle chairman and CEO called the contract an “opportunity to transition through a most difficult period of structural change in the domestic automotive industry." The company had threatened to relocate its manufacturing operations to Mexico if it could not achieve labor costs equivalent to its domestic competitors.

The new contract lowers average workers’ wages by about one-third, freezes pensions, and reduces health-care benefits overall. Workers will be paid a signing bonus that’s meant ease their transition to the lower wage rate.

Workers may opt instead for an early-retirement or separation payment.