American Axle, UAW far apart on money
BY JEWEL GOPWANI • FREE PRESS BUSINESS WRITER • March 4, 2008
Negotiators for American Axle & Manufacturing Inc. and the UAW were tens of thousands of dollars apart on buyouts and annual pay when talks collapsed a week ago, according to documents obtained by the Free Press.
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The documents, which compare proposals from both sides, offer an unusual glimpse at just how determined both sides are -- and how confrontational the talks had become -- as the company aims to cut its labor costs to a more competitive level and the union tries to keep from giving a profitable company more concessions than it needs.
Those staunch positions, analysts say, could indicate a prolonged strike, which already has rippled through the auto industry, forcing General Motors Corp. and suppliers to idle plants and temporarily lay off thousands of workers.
Both sides have said they're ready to negotiate. No talks were slated for Monday night or for today.
No talks have taken place since Feb. 25, when both sides were far apart on issues such as buyouts and wages, according to highlights of proposals from both sides.
The documents show that American Axle proposed buyouts of $80,000 over three years for workers with fewer than 10 years at the company, and $110,000 for workers with 10 years or more of seniority.
Buyouts, wages main obstacles
But the offer is tens of thousands of dollars short of the union's proposal, which was $100,000 for workers with fewer than 10 years of seniority and $140,000 for more-senior workers, in addition to six months of insurance for workers who would take buyouts.
Wendy Thompson, former president of UAW Local 235, said the buyout issue may not be too difficult to negotiate.
"You hit somewhere in the middle and then you're through," she said.
Still, Thompson called the company's demands outrageous.
On wages, the company proposed reducing pay for skilled trade workers from $32.13 an hour to $20.50. The union proposed a reduction to $27.
American Axle's proposal included a $14.50 hourly wage for workers who make axles, and $11.50 an hour for what the company referred to as "direct commodity" jobs, such as manufacturing driveshafts and stabilizer bars.
Production jobs currently pay between $17.50 and $28.15 an hour. The union's wage proposal has several layers, ranging from $14.56 for entry-level, support positions to $21 for core axle-making jobs.
Both sides proposed buydowns in exchange for lower wages. The company did not disclose a formula for a proposed buydown. The union proposed a buydown of four years of lost wages.
The company proposed eliminating 1,000 jobs, reducing the number working at the four operating American Axle plants covered by this contract from about 3,600 to 2,600.
American Axle may cut production
In the documents, American Axle said it would be ready to start cutting production immediately at four of its U.S. plants, if it doesn't receive wage cuts from its UAW workforce.
The company said it would "initiate capacity rationalization and production idling" at two parts of its sprawling Detroit manufacturing campus and a plant in Cheektowaga, near Buffalo, N.Y., by the beginning of September, and plants in Tonawanda, N.Y., also near Buffalo, and Three Rivers, near St. Joseph, in a year.
"No new or successor business would be assigned," the company said in the documents.
American Axle spokeswoman Renee Rogers said the company "plans to continue to make future investment in the original U.S. locations that meet business requirements, including future product sourcing commitments, if a market-competitive, all-in labor cost structure for these facilities is attained."
Labor expert Gary Chaison called the talks "extremely confrontational."
"It's almost asking for a strike," said Chaison, a professor of labor relations at Clark University in Worcester, Mass. "It's almost asking for some face-saving to be done, or the union would ... appear to be caving in."
In the papers, the union said that without information it has requested from the company, "it is virtually impossible to find common ground for true collective bargaining."
In a separate UAW statement, issued Saturday, UAW President Ron Gettelfinger said, "Our union is a responsible organization, and we've worked through complex problems at Chrysler, Ford, GM, Delphi, Dana and other companies. But negotiations can't be a one-way street."
Thousands of layoffs likely at GM
American Axle's largest customer, GM, has shut down four of its truck plants. The automaker planned to shut an SUV plant in Moraine, Ohio, on Monday night and expects to halt production at a Hummer plant in Indiana by about mid-morning today.
More than 11,500 hourly workers at five of those plants face layoffs. Some workers would stay on despite the production halt. GM has told its 2,170 hourly workers in Moraine to report to work today for training.
When asked about the strike Monday during the automaker's February North American sales conference call, Mark LaNeve, GM vice president of North America vehicle sales, service and marketing, said: "I guess it would depend on how long it persists. Right now, it's not a threat to us, given our relatively healthy inventory situation."
But the strike has forced suppliers to lay off workers.
Lear Corp. has had to shut down four seating plants, laying off 1,000 workers. Delphi Corp. expects to temporarily lay off 190 workers at its plant in Lockport, N.Y., because of the strike.
Separately, American Axle said Monday in a filing with the Securities and Exchange Commission that the compensation committee of its board plans to hold off on determining bonuses, long-term incentives and raises for the company's executives until after the talks.
That will allow the committee to "take into account the outcome of the company's current labor negotiations with the UAW in determining the amount of the bonus," the filing said.
Contact JEWEL GOPWANI at 313-223-4550 or jgopwani@freepress.com. Business writer Katie Merx contributed to this report.
