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Published: 4/14/2008

American Axle makes new contract offer to United Auto Workers

DETROIT Striking United Auto Workers union members are considering a new contract offer from American Axle and Manufacturing Holdings Inc. as bargaining continued through the weekend aimed at ending a seven-week strike over company demands for deep pay cuts.

About 3,600 UAW members at five American Axle plants in Michigan and New York went on strike Feb. 26 after the auto parts maker proposed cutting hourly wages about in half. It said it needed the cuts to become competitive with other parts makers.

Company bargainers gave the UAW a new contract proposal Saturday, American Axle spokeswoman Renee Rogers said Sunday. She said bargainers were resuming talks Sunday.

We put a proposal on the table, Rogers said. We re expecting we ll get something back. It s a back-and-forth.

In a statement released later Sunday, American Axle said the UAW rejected its request that a federal mediator assist in the negotiations.

AAM had hoped that the involvement of an impartial third party at the bargaining table could assist both sides. ... AAM was disappointed in the UAW s decision, the statement said.

UAW President Ron Gettelfinger said in a statement released Sunday night that the union concluded that a mediator could add little to the process at this juncture; in fact, it would place the mediator in a no-win situation.

Throughout these negotiations, the UAW has repeatedly offered responsible proposals and counter-proposals to American Axle (AAM) in an attempt to bring a conclusion to bargaining.

Gettelfinger and American Axle chief Richard Dauch met face-to-face last week in an effort to end the dispute. The UAW then presented a new contract proposal the company called a slight improvement but far short of the deep concessions it needed.

The company then repeated earlier threats to close the U.S. plants if costs don t come down.

Auto analyst David Cole said pay cuts from $27 an hour to $14 an hour that current workers faced under the company s pre-strike offer made a quick deal unlikely.

It was going to be a long strike. ... None of these changes are easy, said Cole, chairman of the Center for Automotive Research in Ann Arbor. I would say in the next couple of weeks, we ll probably see an agreement.

The strike has caused parts shortages that have closed or curtailed work at 29 General Motors Corp. factories, affecting about 39,000 hourly employees.

But far from hurting GM, the strike has helped it cut inventories of slow-selling trucks without having to make supplemental unemployment benefit payments required under GM s UAW contract, Cole said.

American Axle has said its U.S. hourly labor cost of about $73 per worker, including fringe benefits, is three times the rate at its domestic competitors and too high for it to win new business.

American Axle, formed from parts plants sold by GM in 1994, wants to cut the labor costs to $20 to $30 an hour, which would be similar to competitors and to what will be paid to some new hires under agreements reached between the UAW and the in-house axle-making operations at Ford Motor Co. and Chrysler LLC.

The other big players in the auto parts business, including Delphi Corp., Visteon Corp. and Dana Corp., have succeeded in rolling back the more generous wages and benefits that the UAW won during the U.S. auto industry s better days, Cole said.

This is the last of the big union contracts, he said. Other than American Axle, all of the suppliers have competitive packages.



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