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Union Negotiates Possible Plant Closings

May 2, 2008
Related Topics: Staffing and the Law, Labor Relations, Workforce Planning, Latest News
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The United Auto Workers is negotiating agreements to close two striking plants of American Axle & Manufacturing Holdings Inc., and a third plant could be closed, according to a report from the UAW local in Three Rivers, Michigan.

On April 30, Local 2093 chairman Dave Morris told strikers that the UAW has agreed to allow American Axle to close forge plants in Detroit and Tonawanda, New York, said Pete Bennett, a former union recording secretary who attended both membership update sessions. Bennett, who is retired, is a five-time delegate to the UAW National Convention.

In a blog posting Wednesday, April 30, Bennett said the Three Rivers axle plant also could close within a year unless workers agree to major concessions. Bennett confirmed his report in an interview on Thursday, May 1.

The Three Rivers plant employs about 800 UAW members. They are among the 3,650 workers who have been on strike at five U.S. plants since February 25.

Bennett said American Axle is demanding concessions that would cut wages to $14 to $18 an hour from the current average of $28. The UAW bargaining team for Tonawanda saw the cuts as too severe and has begun talking about provisions for closing the plant, Bennett said.

A person answering the phone at Local 2093 said local officials would have no comment until there was something to announce about the negotiations. American Axle spokeswoman Renee Rogers declined comment.

Quoting the chairman’s update, Bennett said American Axle wants separate contracts with remaining axle operations in Detroit and New York. That is consistent with assertions made last week by Local 235 president Adrian King, whose UAW unit represents American Axle workers at the company's Detroit complex.

The UAW’s bargaining position in the strike was undercut this week when General Motors announced plans to cut shifts at four pickup and SUV assembly plants in the second half of the year.

The announcement to take 138,000 light trucks out of production means that American Axle has enough manufacturing capacity at its axle plant in Guanajuato, Mexico, to supply a significant portion of GM’s North American axles for the rest of the year.

American Axle generates about 80 percent of its revenue from GM, mostly in North America. The Detroit auto supplier was spun off by GM in 1994. American Axle is the dominant maker of axles for the automaker.

The American Axle strike has idled or hampered production at about 30 GM assembly and parts plants.

The two sides have been making progress at the bargaining table for the last two weeks. Optimism about a settlement reached Wall Street on Thursday as American Axle shares rose 12.8 percent to close at $22.71.

Filed by David Barkholz of Automotive News, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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