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  • Utility Sections > Wires - Utility > News - Wire > Business - Wire

    Business - Wire  

    Posted on Fri, May. 09, 2008 01:51 AM

    GM to pay up to $200M to help end American Axle strike

    In this June 14, 2006 file photo, the General Motors world headquarters in Detroit, is seen from Windsor, Canada. General Motors Corp. says it has bought its previously leased headquarters in downtown Detroit's towering Renaissance Center for $626 million.
    Carlos Osorio, File
    In this June 14, 2006 file photo, the General Motors world headquarters in Detroit, is seen from Windsor, Canada. General Motors Corp. says it has bought its previously leased headquarters in downtown Detroit's towering Renaissance Center for $626 million.

    A bitter, 10-week strike at auto parts supplier American Axle and Manufacturing Holdings Inc. could end soon now that General Motors Corp. has agreed to kick in up to $200 million to help settle the dispute, industry analysts said.

    GM said in a regulatory filing Thursday that it would provide the financial support for temporary payments to supplement reduced wages, and to fund employee buyout and early retirement packages.

    About 3,600 United Auto Workers at five American Axle factories have been on strike since Feb. 26 in a dispute over the company's quest for lower wages and benefits. The work stoppage has crippled production of GM pickup trucks and sport utility vehicles and caused layoffs at 30 GM factories in the U.S., Canada and Mexico. GM is American Axle's former parent and largest customer.

    No deal had been reached between American Axle and the UAW as of Thursday evening, but company spokeswoman Renee Rogers said talks were continuing.

    "We are hopeful that GM's financial assistance to help fund the buyouts, retirement incentives and buy-downs ... will facilitate an expedited resolution to the international UAW strike," Rogers said. "It's been costly and disruptive. A quick return to work will be a win-win-win for everybody."

    American Axle said in a separate filing with the Securities and Exchange Commission that the aid from GM is contingent on a quick end to the strike.

    "We believe the offer will help bridge the gap between American Axle and the UAW and that they will be able to reach a mutually satisfactory agreement in the near future," GM spokesman Dan Flores said.

    GM's announcement brought fresh optimism to the picket lines at American Axle's complex in Detroit.

    "GM has to realize they've got a vested interest in this company doing well," said Bill Alford, president-elect of UAW Local 235, one of the striking locals. Alford said he had not heard from the union's bargaining team since GM made its announcement.

    A phone message seeking comment was left for UAW spokesman Roger Kerson.

    Worker Doug Sherrill, 44, of Macomb County's Macomb Township, said he is optimistic the strike will end, but he still was skeptical after spending 10 weeks on the picket line.

    "We've heard things before and nothing's ever panned out," he said. "I really hope that they would use that money to their advantage for all three of them and end this thing."

    Harley Shaiken, a professor at the University of California at Berkeley who specializes in labor issues, said there are still some tough issues for negotiators to work through, but he believes the investment will resolve the strike sooner than it would have ended without GM's help.

    "It was pretty much understood after a point that GM was going to have to do something. It was not simply an innocent bystander and it was going to be costly," Shaiken said. "I think GM's involvement was a necessary condition for a settlement, but whether the $200 million is a sufficient condition remains to be seen."

    Shaiken pointed out that $200 million would work out to about $14,000 per employee over the life of a four-year contract.

    American Axle makes axles, drive shafts and stabilizer bars mainly for GM's large sport utility vehicles and pickup trucks. The supplier, which formed from parts plants GM sold in 1994, has said its hourly labor costs are far greater than those at competitors who have reached agreements with the UAW, and it needs to lower its costs to gain new business. The company has threatened to move work done at its U.S. plants to foreign factories.


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