UAW Strikes Five American Axle Plants

Approximately 3,650 United Autoworkers members have initiated a strike against American Axle & Manufacturing at the company’s five plants in Detroit and Three Rivers, MI, and Buffalo, Cheektowaga, and Tonawanda, NY. AA&M’s four-year labor contract with the union expired at midnight, February 26. AA&M is a leading supplier of axles and driveline components to General Motors Corp. Its domestic operations are comprised of several onetime GM driveline and forging operations. It also maintains some domestic metal forming and machining operations, as well as manufacturing, engineering, and finishing operations in Mexico, Brazil, England, Scotland, Poland, and China. Recently, the group announced plans to set up a manufacturing operation in Thailand, and at a joint venture in India. In a statement, American Axle reports its primary goal in the current contract negotiations with the UAW is “to achieve a market-competitive labor-cost structure in the United States.” This involves wages, as well as structural changes to its working agreement comparable to what the union has accepted at other domestic automotive suppliers. AA&M draws a distinction between its organization and the automotive OEMs, though contends its labor-cost structure reflects the latter. For comparison, AA&M refers to the labor costs of its competitors, Dana Corp. and the Ford Motor Co. and Chrysler Corp. axle-making operations. AA&M contends that it has conducted formal and informal discussions with the union for more than two years, during which time it has proposed labor rates and other contract terms it says have been agreed to by the UAW with other Tier 1, Tier 2, and Tier 3 companies. According to the UAW, American Axle is seeking wage reductions up to $14 per hour and elimination of future retiree and pension benefits. The union says AA&M has not provided enough justification for the proposals. "The UAW has a proven record of working with companies to improve their competitive position and secure jobs," stated UAW president Ron Gettelfinger. "But cooperation does not mean capitulation. Our members cannot be expected to make the extreme sacrifices American Axle is asking for with nothing in return." According to the company a “market-competitive labor-cost structure in the United States automotive-supply industry is in the range of $20-$30 per hour all-in cost.” American Axle reports its current “all-in labor cost is well in excess of $70 per hour.” It “It is unfortunate that a market-competitive labor agreement for AAM’s original U.S. locations could not be reached,” stated chairman and CEO Richard E. Dauch. “All of the changes we have proposed have been accepted by the UAW in agreements with our competitors in the United States. I have no idea why AAM is being singled out for a different set of economic conditions. We look forward to continued negotiations with the UAW to resolve these most pressing labor and economic matters.” American Axle has been offering buyouts to workers since 2006, in order to reduce its labor costs and long-term benefits and pension obligations. Two separate buyout plans have reduced total employment by about 2,000.