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American Axle, UAW No Closer To Agreement

Strike at auto parts maker could last much longer, largely because the company is profitable but wants concessions, according to some labor experts and workers.

DETROIT (AP) — A two-week strike at auto parts maker American Axle and Manufacturing Holdings Inc. could last much longer, largely because the company is profitable yet wants concessions, according to some labor experts and workers on the picket lines.
As the strike dragged on Monday, it caused a parts shortage that crippled General Motors Corp.'s ability to make pickup trucks, big sport utility vehicles and vans. The company says it has shut down part or all of 28 plants, affecting 37,000 hourly workers.
Four plants in Indiana have been affected: an assembly plant in Fort Wayne, stamping plants in Indianapolis and Marion, and an AM General plant in Mishawaka that makes the Hummer H2.
American Axle wants concessions like those that the United Auto Workers gave to GM, Ford Motor Co., Chrysler LLC, and parts makers Delphi Corp. and Dana Corp.
But American Axle made $37 million last year on sales of $3.25 billion, making it different from the other companies, all of which were losing money or in bankruptcy protection.
''All of the sudden you've got a profitable company saying 'We want what they have,''' said Harley Shaiken, a professor at the University of California at Berkeley who specializes in labor issues. ''The union isn't taking any of this lightly. But it's saying 'Your desire to be more profitable ought not to be coming out of our members' paychecks.'''
American Axle, formed from parts plants sold by GM in 1994, says it needs lower labor costs to be competitive.
The company 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.
The company also has said its original U.S. locations have lost money for the past three years, which union members dispute.
American Axle spokeswoman Renee Rogers said the company is willing to negotiate buyouts, early retirement packages or payments to buy down the wages of workers, ''but we have to have a market competitive cost structure in order to do that.''
Shaiken said automakers gave extensive financial information to the UAW before the union granted concessions, which included a trust fund that will take on the multibillion-dollar cost of retiree health care and wages as low as $14 per hour for many new hires.
But the UAW says American Axle won't give it the information it needs to evaluate company proposals. The company, however, says it has given the UAW all the information it is entitled to.
The result, Shaiken says, is a stalemate in talks that restarted Thursday. Rogers said talks ended for the day Monday and would resume on an unspecified day later this week.
Shelly Lombard, senior high-yield credit analyst at New York-based bond research firm GimmeCredit, said the union is ''conveniently ignoring'' the fact that American Axle is heavily dependent on making parts for pickup trucks and SUVs in North America, two market segments that aren't doing well.
American Axle may be profitable now, but may not be in the near term as it transforms itself into a more global company that isn't so dependent on the North American market, she said.
''These guys are very vulnerable,'' she said of American Axle. ''They've got all the negative traits of GM. They're in better financial condition. They need a couple of years where they can transition.''
On the picket lines at American Axle's main factory complex in Detroit Monday, workers said they have thought all along that the strike would be lengthy.
Some blamed it on GM, which they claim is using the strike as a lower-cost way to reduce bloated supplies of trucks and SUVs.
''Their inventory is backed up,'' said 13-year worker Wendell Nolen of Eastpointe, one of 3,600 UAW members who went on strike Feb. 26 at five American Axle plants in Michigan and New York. ''They really don't need axles.''
Indeed, GM has ample supply of the vehicles for which American Axle makes parts. Mark LaNeve, GM's top sales executive, said last week the company would be in ''great shape'' with pickup trucks for 60 to 90 days. Industry analysts have said the company has more than a 100-day supply of pickups and SUVs.
''There's a lot of politics involved here,'' said worker Scott Reinke of New Baltimore, who also believes GM is behind the growing length of the outage.
GM spokesman Tom Wickham would not comment on the workers' allegations.
Even though American Axle and the union are negotiating, picketing workers had little hope that the strike would end before the Easter holiday on March 23.
Many have prepared for a long outage, Reinke said while standing next to a fire barrel on the picket line.
''We all save money for times like this,'' he said.
American Axle makes axles, drive shafts and stabilizer bars for GM, Chrysler and other automakers. GM accounts for about 80 percent of American Axle's business, with 10 percent going to Chrysler.
Chrysler says its Newark, Del., assembly plant has enough parts to make it through this week before it could be temporarily closed. American Axle makes components for Dodge Durango and Chrysler Aspen SUVs made in Newark.
GM shares fell to a 52-week low on Monday, closing at 20.89, down $1.07, or 4.9 percent.
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