American Axle to Cut Salaried Workforce

July 10, 2008
Buy-outs aim to reduce staff by 20%

American Axle & Manufacturing plans to cut as many as 400 salaried workers as it strives to offset weak demand for its driveline, drivetrain, and chassis products. A spokeswoman indicated the company expects to reduce one salaried position for every five hourly jobs it cuts as it implements a new labor agreement.

Detroit-based American Axle is closing two manufacturing plants in Detroit and Tonawanda, NY, and eliminating 2,000 hourly workers through buyouts. The deal reached with the United Autoworkers in May following a three-month strike will see AAM reduce its workforce through early retirements and buyouts, as well as plant closings and layoffs. About 1,650 hourly workers will remain at three plants in Michigan and New York, with wages reduced by as much as 40%.

Now, AAM has offered early-retirement packages to the salaried workforce, which numbers about 2,000 worldwide. The company signaled such cuts were planned as it finalized the new contract in May.

Speaking of the salaried staff, American Axle’s Renee Rogers said "we obviously have to make adjustments. We made the offers in late June."

Layoffs of salaried workers remains an option if the early-retirement offers and attrition are ineffective in achieving the anticipated savings.