March 9, 2008 / 7:53 PM / 10 years ago

American Axle talks continue as pressure mounts

DETROIT (Reuters) - Talks between 3,600 workers and American Axle & Manufacturing Holdings (AXL.N) continued for a fourth straight day on Sunday as the two sides worked toward a deal to end a nearly two-week-old strike that has hobbled GM truck production in the United States and Canada.

Bargaining teams from the United Auto Workers and Detroit-based American Axle met all day Saturday and reconvened for talks on Sunday, company spokeswoman Renee Rogers said.

The renewed talks marked the first time the two sides have opted to talk through the weekend and came as the disruption from the UAW strike showed signs of deepening for American Axle’s main customer, General Motors Corp (GM.N).

“It sounds like they’re progressing -- at least they are still at the table,” said Rogers.

GM, which spun off American Axle in 1994 and relies on it for parts for its trucks, has taken steps to shut or partly shut almost 30 facilities employing over 37,000 workers in the United States and Canada because of component shortages.

GM has said 22 plants, including facilities in Michigan, Missouri, Wisconsin, Ohio, New York and Indiana, will be shut down or shift to shortened work hours starting on Monday.

GM has stopped or slowed work at eight assembly plants building its Chevrolet Silverado and GMC Sierra pickup trucks and also sport utility vehicles like the Hummer H2.

Some analysts have said GM could be called in to help mediate the talks in a bid to move them toward a resolution that would allow it to avoid a more costly loss of production.


Analysts say the spreading impact of the strike on GM brings a new urgency to the restarted negotiations between the UAW and American Axle. The talks had broken down over the company’s demands for steep wage cuts it says it needs to maintain production in the United States.

UAW-represented workers in Michigan and New York went on strike against American Axle on February 26. The supplier relies on GM for almost 80 percent of its sales.

American Axle has said it needs concessions that would take its hourly labor cost in the United States from above $73 per hour to between $20 and $30 per hour to be competitive. It has also proposed closing plants in New York and some work facilities within its sprawling production complex in Detroit.

The UAW has filed an unfair labor practices complaint against the company, claiming it had not been sharing key financial information with the union during the six months of talks that preceded the strike.

Shares of American Axle surged almost 11 percent on Friday after KeyBanc Capital Markets analyst Brett Hoselton issued a strongly bullish note for clients on the strike.

Hoselton predicted that the company would succeed in getting all of its current U.S. workers to accept buyouts or one-time payouts in exchange for lower wages, a step he said could save the company $50,000 per worker on an annual basis.

“We now believe that 100 percent of the 3,650 UAW workers will take either a buyout or a buy-down package,” he said.

On a UAW picket line in Detroit, however, strikers were adamant that they could not accept the kinds of steep concessions sought by the supplier.

“How would anyone feel about a 65-percent pay cut? Whether they’re making $10 an hour or $50 an hour, they’re not going to accept that,” said Rick Hughes, a 14-year employee.

Mike Jackson, 52, who has spent 31 years with American Axle dating back to when it was still part of GM, said the union was drawing a line in the sand at a time when it is being pushed for concessions from the battered U.S. auto industry.

“We aren’t just doing this for ourselves. We’re doing it for everyone,” Jackson said. “This could happen to anybody. This isn’t about economics. It’s about taking a stand.”

American Axle posted a net profit of $37 million on $3.2 billion in sales in 2007.

Reporting by Kevin Krolicki and Thom Gillis, editing by Richard Chang

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