American Axle And Uaw Reach Tentative Agreement

fbachman · May 17, 2008

DETROIT (Reuters) -- The United Auto Workers and American Axle & Manufacturing Holdings Inc. said today that they had reached a tentative agreement that may end a nearly three-month strike by 3,650 U.S. hourly workers.

The UAW went on strike on Feb. 26 at five U.S. plants in Michigan and New York. It was the start of what has become one of the longest strikes in the 73-year history of the union.

The union said in a short statement that it would hold a meeting in Detroit on Sunday to explain the contract to workers there.

The UAW will schedule other meetings to discuss the details of the agreement with workers in Three Rivers, Mich., and in New York state, at a later time, the union said. Ratification votes could take place in the coming week.

An American Axle spokeswoman confirmed that an agreement had been reached, but declined to give details.

The strike at American Axle has at least partly idled production at about 30 General Motors plants in North America.

BIG RELIEF FOR GM

GM accounts for about 80 percent of the revenue for the auto parts supplier, which was formed in 1994 when CEO Richard E. Dauch led a group of investors that bought the company's assets from the No. 1 U.S. automaker.

American Axle had sought steep cuts in wages and benefits for its UAW-represented workers and had been looking to cut at least two of its factories.

The Detroit-based supplier had argued it could no longer afford the wage and benefit packages paid by major automakers in competition with other suppliers, including Dana Holding Corp., that have come through bankruptcy with sharply lower labor costs.

For its part, GM offered $200 million to fund buyouts and one-time payouts to remaining workers in exchange for lower hourly wages.

The automaker has been struggling with plunging demand for trucks and sport utility vehicles and the strike gave GM a chance to run down overstocked inventory for slower-selling models including its Chevrolet Silverado pickup.

But GM, which books revenue when it produces vehicles, also said that the strike had cost it $800 million in the first quarter and 230,000 units of lost production as of April.

GM had also shut or partly idled over 30 facilities and put thousands of its own hourly workers on lay-off due to parts shortages caused by the strike.

A LONG, BITTER STRIKE

At 80 days through Friday, the American Axle strike ran longer than major recent actions by the UAW, including a 59-day strike against two GM plants in 1998 and a 67-day strike against GM in 1970 that won a 13-percent pay raise.

From the start, the tone of the American Axle dispute was also more bitter than contract talks with the major automakers last year when the UAW agreed to slash costs by bringing in new hires at lower wages and shifting retiree health care costs to a union-aligned trust.

The UAW accused American Axle of unfair labor practices by failing to share financial information and of overpaying executives, including Dauch.

American Axle posted a net profit of $37 million on $3.2 billion in sales in 2007. The company gave Dauch a 9-percent raise in 2007, taking his total compensation to $10.2 million.

The UAW's Gettelfinger blasted that as "excessive," saying Dauch had collected over $257 million in pay over a decade.

Gettelfinger, who joined the bargaining in recent weeks, also said the company should be renamed, "Axle -- Mexico and elsewhere" after the supplier threatened to ship production to Mexico unless its U.S. workers made deep concessions.

For its part, the company had said the union was out of touch with economic reality by insisting that it offer full medical insurance and supplemental unemployment pay. The supplier said the union had also failed to recognize how badly the decline in U.S. light truck sales had undermined its business during the strike.

At more than $70 per hour, American Axle had also said its overall labor costs ran three times higher than its rivals.

It promised to invest up to $200 million in remaining U.S. plants if the union agreed to a cost-cutting wage agreement.

Wall Street analysts have expected the company to get most of its demands, a view that has supported its stock price in the face of slumping U.S. auto sales. Shares in American Axle are up 21 percent since the start of the year.

pennzoil29 · May 17, 2008

Filthy rich bastards. What more can you say? I now hope, that everyone waiting on their new truck/suv will be getting them soon.

VMax2007 · May 17, 2008

I say we make a pool to guess when the next UAW strike happens.

I'll say within 2 months.

It will never end until the unions are gone or until the US auto industry is gone. One of the two will happen, most likely the latter unfortunately.

D&SYukonDenali · May 17, 2008

I say we make a pool to guess when the next UAW strike happens.

I'll say within 2 months.

It will never end until the unions are gone or until the US auto industry is gone. One of the two will happen, most likely the latter unfortunately.

+1 - Except the auto industry will go into chapter 11 protection and get approval to void all contracts to renegoiate. Congress will step, put together a bail out package, both sides will give a little, company steps out of bankruptcy only to butt heads with the union again 2 - 5 years down the road (vicious cycle). The real losers in all of it, tax payers who pay for the bail out.

Just my opinion.

fbachman · May 17, 2008

I'll say within 2 months.

I was gonna say MONDAY....

It will never end until the unions are gone or until the US auto industry is gone. One of the two will happen, most likely the latter unfortunately.

yep !

VMax2007 · May 17, 2008

Sometimes I just want to say f**k it and move to Australia.

pennzoil29 · May 17, 2008

Sometimes I just want to say f**k it and move to Australia.

I think it is almost wintertime there. You want to go through that again?

VMax2007 · May 17, 2008

Sometimes I just want to say f**k it and move to Australia.

I think it is almost wintertime there. You want to go through that again?

Ah hell, by the time I sell my house and get ready to go, it will be fall here and I'll have summer to look forward to all over again.

Wanna join me?

pennzoil29 · May 17, 2008

Sometimes I just want to say f**k it and move to Australia.

I think it is almost wintertime there. You want to go through that again?

Ah hell, by the time I sell my house and get ready to go, it will be fall here and I'll have summer to look forward to all over again.

Wanna join me?

Hell, why not. Then we could really butt heads. I think I might leave the ole' lady here though.

pennzoil29 · May 17, 2008

Sometimes I just want to say f**k it and move to Australia.

I think it is almost wintertime there. You want to go through that again?

Ah hell, by the time I sell my house and get ready to go, it will be fall here and I'll have summer to look forward to all over again.

Wanna join me?

Hell, why not. Then we could really butt heads. I think I might leave the ole' lady here though.

Don't take that, the way I think you will, I've been told there are some pretty hot babes down under.

VMax2007 · May 17, 2008

Don't take that, the way I think you will, I've been told there are some pretty hot babes down under.

I always thought "down under" they are all the same? Oh, you meant in Australia, nevermind.

pennzoil29 · May 17, 2008

Don't take that, the way I think you will, I've been told there are some pretty hot babes down under.

I always thought "down under" they are all the same? Oh, you meant in Australia, nevermind.

unit731 · May 17, 2008

Ego sum memor ili quisnam venit pro mihi. Gratias ago vos.

As Spartus stated on: March 2, 2008

Hi guys, thought I'd clear up some mis-information.

That $70 is a LOADED labor wage. The actual wage is around $24 an hour. The CEO wants the workers to take a cut($9.50) to $14.50 with NO compensation for the cut. That would be like someone else making $13 an hour and being told they are going down to $7 an hour to help corporate greed. Try setting your standard of living to 48k a year, and going down to 30k. It won't be easy for those workers, but I'm sure a bunch will succeed. But get ready for another rush of foreclosures and re-po's.

That $70 an hour LOADED, is a bunch of BS by the way. The beginning of the year, the workers healthcare was cut, and now only covers emergency room and hospital visits along with some referrals. No Dr visits or procedures in the Dr office are covered any longer. Still better than nothing though. All holiday pay, and vacation time is also thrown into that $70/hr. It's a FANTASY # that they came up with.

In 2006 AAM posted a LOSS because they gave early retirements to 1400 employees, and wrote the entire thing off in one year. If not for that, profits would have been over $100 million.

In 2007 they posted a $35 million profit. It would have been $120 million if they hadn't shut down the Buffalo plant and paid $85 million in severance to the employees and management they kicked out onto the street. They moved most of the work to a plant that pays workers $7.50 an hour with no benefits.

Also, the UAW does have it's place. And this is one time when they are needed. Without the UAW establishing workers rights, fair pay, and decent benefits, 90% of you would be eating off of the bottom of the corporations shoes. The UAW set the standards that other companies follow when it comes to wages and benefits. Even TOYOTA pays its workers $20 an hour, and has excellent health care, along with 401k plans. If not for the UAW, Toyota workers in the US would probably be making $8.00 an hour.

Ok, I'm off my soap box now.

omegafiler · May 17, 2008

Well, $70/hour is typically the total amount it costs the company to keep an employee around. That includes hourly wage, benefits, vacation, sick time, insurance, etc. So it's not exactly a "BS number." It's very relevant when companies are looking to see what it really costs to keep an employee. All companies have that figure hidden around somewhere.

These days, Unions simply aren't needed, and do far more harm than good. If they do really "under-pay" workers, they'll simply leave, and go to another company that's paying more... Toyota for example. And if that happens, then the company would naturally have to increase their pay or lose talented workers. But what normally happens is that you weed out the dead weight that all companies have. These are the employees slacking off or that they can't get rid of thanks for the unions.

I do agree that you've got greedy executives getting over paid and that's good reason to get angry. But that's for the share holders and board members to deal with. It's about time the union employees get paid for the job they do as determined by the market, not unreasonable unions living in a dream world. Sure, it'll be tough adjusting to a drastic and long over due pay cut. But now they can join the rest of the working economy and get paid more in line with everybody else in their field.

But hey, that's just my opinion.

D&SYukonDenali · May 17, 2008

Well, $70/hour is typically the total amount it costs the company to keep an employee around. That includes hourly wage, benefits, vacation, sick time, insurance, etc. So it's not exactly a "BS number." It's very relevant when companies are looking to see what it really costs to keep an employee. All companies have that figure hidden around somewhere.

These days, Unions simply aren't needed, and do far more harm than good. If they do really "under-pay" workers, they'll simply leave, and go to another company that's paying more... Toyota for example. And if that happens, then the company would naturally have to increase their pay or lose talented workers. But what normally happens is that you weed out the dead weight that all companies have. These are the employees slacking off or that they can't get rid of thanks for the unions.

I do agree that you've got greedy executives getting over paid and that's good reason to get angry. But that's for the share holders and board members to deal with. It's about time the union employees get paid for the job they do as determined by the market, not unreasonable unions living in a dream world. Sure, it'll be tough adjusting to a drastic and long over due pay cut. But now they can join the rest of the working economy and get paid more in line with everybody else in their field.

But hey, that's just my opinion.

100% agree.