American Axle to close signature Detroit plant UAW talks fail; 300 employees affected

American Axle to close signature Detroit plant
UAW talks fail; 300 employees affected
Dustin Walsh
Automotive News | June 30, 2011 – 5:08 pm EST

DETROIT – American Axle & Manufacturing Holdings Inc. will close its Detroit manufacturing complex in February following a breakdown in labor talks with the UAW.

Approximately 300 hourly and salaried workers will be affected by the closure, said Christopher Son, a spokesman for the Detroit-based supplier.

American Axle, a former General Motors unit, sought to get a market competitive labor contract with the UAW much like its Three Rivers, Mich., facility, Son said. Axle wanted to reduce compensation to $30 an hour, down from $45 an hour, he said.

“It’s a matter of being market competitive and achieving an appropriate cost structure,” Son said. “This facility was lacking in that and this is the unfortunate outcome.”

The plant is adjacent to the company’s Detroit headquarters and supplies front and rear axle assemblies and steering linkages for light trucks. It suffered from shifting demand to more fuel-efficient models, Son said.

The plant will officially close no earlier than Feb. 26, 2012, when the current UAW contract expires.

Like Delphi, Visteon and other U.S.-based suppliers, American Axle has shifted manufacturing overseas to take advantage of lower wages and to be closer to customers.

Son said American Axle hasn’t made any decisions on whether the complex will be sold or used for other purposes.

The supplier, which avoided bankruptcy during the industry collapse of 2008 and 2009, more than doubled its earnings in posting its sixth straight quarterly profit in the first quarter of this year.

American Axle posted first-quarter net income of $37.7 million compared with a profit of $16.3 million a year earlier as the company attracted more non-GM business.

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