Talks break down over proposed concessions
The UAW sent most of its members at American Axle & Manufacturing Inc. on strike early today, protesting the company's proposals on wage and benefit concessions.
People filtered out of the union hall for UAW Local 235, on Holbrook Street in Hamtramck, with picket signs. Some were moving toward the nearby American Axle complex.
“The UAW has a proven record of working with companies to improve their competitive position and secure jobs,” said UAW President Ron Gettelfinger in a statement. “But cooperation does not mean capitulation. Our members cannot be expected to make the extreme sacrifices American Axle is asking for with nothing in return.”
The strike affects about 3,600 workers in American Axle plants in Michigan and New York. The UAW represents about 1,000 more workers under different contracts at the company.
In a letter to members handed out at meetings Monday night, the union said the company had made unreasonable proposals on wages and proposed increasing co-pays for prescription drugs, eliminating vision coverage and freezing pension benefits, replacing them with a 401(k) plan.
The union said it requested information from the company on the assumptions used to reach these demands, but the supplier has so far refused. The union is now accusing American Axle of committing unfair labor practices.
"We will have no alternative but to strike," the letter said. American Axle's contract expired at 11:59 p.m. Monday.
In a statement, the UAW said the company demanded wage reductions of up to $14 an hour.
In its own statement, the company said its primary objective "is to achieve a market-competitive labor cost structure in the United States," similar to agreements other companies had reached with the UAW.
Without such changes, the company said, its ability to compete for future business or retain existing business at these locations is in immediate jeopardy.
This is the third strike against an auto company in six months and the second strike against Detroit-based American Axle in four years.
Earlier Monday evening, the two sides were still far apart on the fundamental issue of wages, which the company has been seeking to lower for more than 3,000 workers, said people familiar with the negotiations.
Another sticking point in the talks was the company's proposal for plant shutdowns, said Wendy Thompson, former president of UAW Local 235, who had been briefed on the talks.
Management has said it wants to lower the overall compensation from $65 an hour, including wages and benefits, to $27.
That would take wages from about $27 an hour to more like $14 to $18 an hour -- a level closer to what Delphi Corp. pays, or the second-tier wage negotiated at the Detroit Three last summer.
"We continue to believe the new contract has the potential to take down AXL's labor cost by $20 an hour and, with attrition programs, yield potential savings of $200 million annually," said Lehman Brothers auto analyst Brian Johnson.