Experts: Break in talks a bad sign in American Axle strike, but vehicle supply not affected

3/12/2008

DETROIT The two sides are talking by phone instead of face-to-face, a bad sign in the two-week-old dispute between American Axle and the United Auto Workers, two labor experts said Tuesday.

Company and union officials each said formal negotiations have ended for the time being but communication would continue.

The company issued a statement Tuesday blaming the break-off in negotiations on the union but saying discussions between the two sides would resume Thursday.

About 3,600 UAW workers have been on strike at five American Axle and Manufacturing Holdings Inc. plants since Feb. 26, forcing closures and cutbacks at General Motors Corp. and parts supply factories in the U.S. and Canada.

Five Indiana plants have stopped production since the strike: an assembly plant in Fort Wayne, stamping plants in Indianapolis and Marion, a casting plant in Bedford and an AM General plant in Mishawaka that makes the Hummer H2. GM previously had misstated the casting plant was in Bedford, Ohio.

American Axle s statement said formal talks were halted Monday when the UAW sent its negotiators home. The UAW s decision ... extends the work stoppage implemented by the UAW-represented work force.

Union officials did not acknowledge halting the direct bargaining but said the company didn t budge during negotiations that lasted from Thursday to Monday.

I think there may still be some dialogue going on at the upper levels, but it was very clear to us after spending the weekend there that this was still pretty much a one-way street, that the company really hadn t changed their position at all, said Erv Heidbrink, president of a UAW local in Three Rivers and one of the union s negotiators.

Company spokeswoman Renee Rogers would not comment on American Axle s bargaining stance other than to say it is seeking a cost-competitive wage structure in the U.S.

The company has said previously that it wants to pay the same lower wages the union has settled on at competing parts makers and GM, Ford Motor Co. and Chrysler LLC.

Labor experts said the lack of face-to-face bargaining during a strike means neither side is showing movement.

This has got the makings of a protracted strike, said David Gregory, a professor of labor law at St. John s University Law School in New York City. It s already a serious strike, but this could go into April.

Gary Chaison, a labor specialist at Clark University in Worcester, Mass., said American Axle probably was counting on getting similar concessions the union gave to other parts suppliers, even though American Axle is profitable and the competitors are not. American Axle made $37 million last year on sales of $3.25 billion.

I don t get a sense that there s give and take, and I don t get a sense here that the company is willing to lose, willing to back off its demands, Chaison said.

But he said the union has to make concessions because it did with other parts suppliers and Detroit s major auto makers, Chaison said.

If you bend at one company then you ve got to bend at the others, he said.

The strike has caused a shortage of the axles, drive shafts and stabilizer bars made by American Axle, forcing GM to shut down all or part of 28 plants, affecting more than 37,000 hourly workers.

GM Chairman and CEO Rick Wagoner told reporters in Washington, D.C., Tuesday that the strike has had little impact on sales because inventories are high and the auto market is weak.

American Axle makes parts for GM s flagship pickup trucks as well as its large sport utility vehicles and vans.

Wagoner said the strike will hurt GM s first-quarter financial results, but as far as the business goes, it s not really affected us a lot.

Even with plant closures and slowdowns, dealers reported they still had plenty of the vehicles.

It s not that big of a deal yet, said John Clark, president of Avenue Chevrolet in the Chicago suburb of Batavia, Ill. There s still ample trucks out there. If I don t have it, I m sure somebody within 20 miles will.

But KeyBanc analyst Brett Hoselton wrote in a note to investors Tuesday that GM may soon have to intervene because its inventory of large SUVs will become depleted.

We believe the automaker may begin exerting more influence on discussions very soon, which suggests the possibility of significant near-term progress and/or a tentative agreement, Hoselton wrote.

The strike at one time threatened production of Chrysler s large SUVs at its Newark, Del., factory, but spokeswoman Michele Tinson said in an e-mail Tuesday that American Axle has started producing more parts for the SUVs in Mexico.

American Axle, formed from parts plants sold by GM in 1994, says its manufacturing workers can make up to $73.48 per hour in wages and benefits, three times the rate at its U.S. competitors. American Axle wants to cut that to $20 to $30 an hour, which would be similar to the agreements reached between the UAW and the in-house axle-making operations at Ford and Chrysler as well other parts suppliers.