Supplier Strike Could Last Through April, Expert Says
March 14, 2008

By Joseph Szczesny

The United Auto Workers strike at American Axle & Manufacturing Inc. that affected 28 General Motors plants across the country could easily last through April, one industry expert said Thursday.

Sean McAlinden of the Center for Automotive Research in Ann Arbor, Mich., said of the strike against American Axle: "I could see it going 60 days. The union has been telling people its members can stay out 60 days or longer if necessary, and I believe them."

The UAW strike against Detroit-based automotive supplier American Axle already has shut six GM assembly plants and idled all or parts of 22 other GM plants nationwide.

The strike began Feb. 25 after UAW bargainers rejected American Axle's demands for deep cuts in wages and benefits. The union also has complained American Axle's management had refused to provide them with the financial data their negotiators needed to evaluate the company's demands.

Meanwhile, the UAW and American Axle did agree to resume face-to-face discussions Thursday, undoubtedly under pressure from GM. Still, there are very few signs the talks are making any headway. More discussions were scheduled for Friday.

Other strikes suggest this one against American Axle could be a long one. In a strike that didn't get much attention, 2,600 members of the UAW stayed out on picket lines for more than 40 days in a strike against Volvo AB's truck operations in Virginia. Volvo and the UAW finally reached a settlement earlier this week.

The American Axle strike has already generated a lot of emotion on both sides, which is likely to make compromise more difficult, noted Greg Gardner of the consulting firm of Troy, Mich.,–based Oliver Wyman, which produces the Harbour manufacturing efficiency report.

GM: Managing But Hurt
For now GM insists it can manage its way through the strike since dealers already have large inventories of unsold pickup trucks and SUVs. Still, GM Chairman and CEO Rick Wagoner said this week during an appearance in Washington the strike will hurt GM's first-quarter financial results.

Analysts at Germany's Deutsche Bank have estimated the strike has already cost GM $450 million. Four of the six plants build pickup trucks, one builds midsize sport-utility vehicles and another commercial-sized vans.

McAlinden also said there is some anecdotal evidence cropping up suggesting GM has begun to lose business from small commercial fleets to Ford and Chrysler. "This is very profitable business for them," he said.

GM, Chrysler: Struggling to Keep Plants Running
GM and Chrysler have succeeded in keeping some plants open in the face of the strike. Chrysler spokeswoman Michelle Tinson said American Axle has re-sourced production of a key component to a plant in Mexico so its Newark, Del., assembly plant where the Dodge Durango and Chrysler Aspen are built is no longer threatened with parts shortages. The American Axle plant in Saltillo had been building parts for Dodge trucks.

GM is working to keep open the three remaining truck and SUV assembly plants that have escaped the fallout from the strike. GM's assembly plant in Janesville, Wis., will operate only one shift next week. The plant is scheduled to operate only one shift the following week if the strike continues, said GM spokesman Tom Wickham.

The GM plant in Arlington, Texas, also may be able to operate for two weeks more but Wickham declined to say if GM has begun pulling parts out of Mexico to keep the remaining assembly plants in operation. Wickham also declined to discuss how many units GM has now lost or if GM has any contingency plans for making up lost production after a settlement is reached at American Axle.

He did say that by the end of this month, plans are more indefinite.

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