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UAW, American Axle in Tentative Agreement

May 18, 2008
Voting to start Monday on four-year deal to end 12-week strike

The United Autoworkers union confirms it has agreed to a new labor contract with American Axle & Manufacturing, where 3,600 members have been on strike since March 1. Details of the tentative agreement have been presented to the rank-in-file members, who will begin to vote on it Monday, May 19, according to press reports.

Early reporting indicates the proposed contract would run for four years, and clear the way for closings at two American Axle forging plants, in Detroit and Tonawanda, NY. Remaining workers would receive a $5,000 signing bonus and one-time cost of living adjustments, and range of buy-out and early retirement options.

"Our members at American Axle have displayed extraordinary solidarity during this strike," UAW president Ron Gettelfinger stated. "The bargaining committee worked extremely hard to achieve this tentative agreement and they have voted to recommend it to the membership."’

American Axle has not commented on the tentative contract. Some reports indicate that in addition to the plant closings, the company will agree to invest $170-200 million in the remaining three plants, as well as to locate new business there.

The strike at five American Axle plants has led to work stoppages at over 30 General Motors plants, which produce SUVs and light trucks that rely on American Axle-supplied parts. Reportedly, GM production volume is down by about 230,000 units through April, and the automaker reported a first-quarter loss of more than $800 million, some of which is related to the loss of production.

American Axle has insisted on lower employment costs, at levels equal to domestic competitors, and has threatened to relocate work overseas if those cost levels are not achieved. Some reports indicate that negotiators have already agreed to wage cuts for production workers and skilled tradesmen, and shut-downs for two of the five plants involved in the strike, at Detroit and in Tonawanda, NY.

Hoping to expedite settlement, GM earlier this month offered to contribute $200 million to the new contract cost, to help finance buyouts, early retirement packages, and bonus payments to workers whose wages are due to be cut.