GM Closes Truck Plant Due to Supplier Strike
February 28, 2008

By Joseph Szczesny

DETROIT -- The strike by the United Auto Workers against American Axle & Manufacturing Inc. has begun to pinch production of General Motors' pickup trucks, including the 2008 Chevrolet Silverado and 2008 GMC Sierra.

GM shut its assembly plant in Pontiac, Michigan, Thursday as the strike created shortages of critical parts. GM said it has not yet decided whether to close more truck plants. GM hopes to keep other pickup truck plants in Flint, Michigan, and Fort Wayne, Indiana, running at least into next week, sources said.

The Pontiac plant employs 2,600 people on two shifts. GM had planned to reduce production at the plant to one shift this spring but delayed the move.

GM buys more than 70 percent of the parts made by AAM, which produces axles, drivetrain and chassis systems, and related components for its trucks, including the Silverado and Sierra; its full-size sport-utility vehicles, including the 2008 Chevrolet Tahoe and 2008 GMC Yukon; and crossover vehicles.

The strike also could force Chrysler LLC to curtail production of pickup trucks.

The UAW went on strike Tuesday against American Axle after failing to negotiate a new contract with the company's management. Bargaining has yet to resume.

American Axle is pressing the union for substantial cuts in wages and benefits, including cutting in half the wages of some employees now making more than $28 per hour. Union officials have said they are willing to be flexible but the company has not provided critical financial information or made any kind of commitment to re-invest in its U.S. operations.

"It is unfortunate that a market-competitive labor agreement for American Axle's original U.S. locations could not be reached," said company president Richard Dauch. "All of the changes we have proposed have been accepted by the UAW in agreements with our competitors in the United States."

Last week UAW members employed by Magna International Inc. in Syracuse, New York, agreed to an $8-per-hour reduction in wages and a less-expensive benefit package in return for a payment of $87,000 spread out over four years. The contract cut the average wage at the plant to $20, Magna officials said.

Some analysts say the American Axle strike could drag on, because GM has a large inventory of unsold trucks, as high as 150 days of supply, well above the 60-day norm.

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