UAW says 2,200 Axle workers took buyouts

Automotive News | July 23, 2008 - 2:16 pm EST

DETROIT (Reuters) — About 2,200 union workers at American Axle & Manufacturing Holdings Inc. have accepted buyout and retirement offers, exceeding the company’s target, a union official with knowledge of the matter told Reuters on Wednesday.

The number represents 60 percent of American Axle’s 3,650 U.S. hourly workers represented by the UAW and underscores concerns among workers about collapsing sales of trucks and SUVs, for which the supplier makes parts.

The company had been aiming for 2,000 UAW workers to accept packages to leave the company. Workers had a deadline of July 18 to accept a buyout and have until Friday to reconsider.

American Axle spokeswoman Renee Rogers said the company has not yet compiled a final buyout tally since workers still could reconsider their decisions.

Many UAW workers were worried about the risk of prolonged layoffs because of slower truck sales for American Axle’s biggest customer, General Motors, a key reason behind the strong acceptance rate, the official said.

The Detroit supplier is providing UAW-represented workers with buyout packages of up to $140,000 under a new four-year contract.

Under the agreement, it is also cutting hourly wages by almost 40 percent and offering "buydown" payments of up to $105,000 over three years for workers who remain in return for accepting lower wages.

UAW workers ratified the concessionary contract in late May, ending an 87-day strike that had at least partly idled about 30 GM plants due to shortages of axles and related components.

But now American Axle is feeling the pinch as GM, which represents almost 80 percent of its revenue, is slashing production of trucks and SUVs in response to tumbling demand.

GM’s U.S. sales were down 16 percent year-to-date through the end of June, led by a 21 percent drop in truck sales.

American Axle ranks No. 55 on the Automotive News list of the top 100 global suppliers with estimated worldwide original-equipment automotive parts sales of $3.25 billion in 2007.