GM, Chrysler Supplier Takes a Strike
February 26, 2008
By Joseph Szczesny
More than 3,650 members of the United Auto Workers (UAW) began a strike early Tuesday against American Axle & Manufacturing Holding Inc., a key supplier to both General Motors Corp. and Chrysler LLC, which could quickly feel the impact of the walkout.
The strike began shortly after midnight when the company and union negotiators reached an impasse over wage cuts for employees at American Axle plants in Michigan and New York.
More than 70 percent of the parts made by American Axle, which makes drivetrain and chassis systems and related components for light trucks, sport-utility vehicles and crossover vehicles, are purchased by GM, which could be forced to close several plants if the contract dispute is not quickly resolved.
Four years ago a brief UAW strike at American Axle forced GM to close plants in Pontiac, Michigan,and Fort Wayne, Indiana, and to curtail production at a third plant in Flint, Michigan. This time around, those plants as well as GM's truck and SUV plants Janesville, Wisconsin, Arlington, Texas, and Oshawa, Ontario, could quickly face shortages of critical parts and face shutdown.
Chrysler also could be forced to close down pickup-assembly lines if the strike continues. Both companies, however, appear to have more than enough inventory to ride out a short strike.
Renee Rogers, American Axle spokeswoman, said the company was looking for a contract that brings wages and benefits at its U.S. operations into line with those at other suppliers in the U.S. “Companies in our competitive set in the U.S. are paying between $20 and $30 per hour while we’re paying $65 per hour” for both wages and benefits, Rogers said.
In addition, both Chrysler and Ford have designated workers at their in-house axle plants non-core, meaning workers assigned to those operations in the future have their wages cut in half in accordance with their UAW contracts negotiated last fall.
The UAW has made significant concessions to several key suppliers recently but a settlement on the terms outlined by American Axle officials would require deep cuts in wages and benefits by active union members rather than new hires, union members have said. The union has tried to avoid cutting the wages of active members.
In addition, union activists have been campaigning against concessions at American Axle. The pressure from the activists, who appear to be better organized at American Axle than in other sections of the union, has made the task of shaping the settlement more difficult for both sides.
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