American Axle to close its Detroit manufacturing facility

Article by Christian Andrei, on June 30, 2011

The Detroit manufacturing facility of American Axle & Manufacturing Holdings Inc. will be closed in February after a breakdown in labor negotiations with the UAW. It will close no earlier than Feb. 26, 2012, which is the date when an existing UAW contract expires.

Around 300 hourly and salaried employees will be affected by this matter, spokesperson Christopher Son said. Formerly a unit of General Motors, American Axle wanted to have a competitive labor deal with the UAW just like an agreement that is in place at its Three Rivers facility in Michigan, Son disclosed.

He said that the company wanted to lower the hourly compensation from $45 to $30. According to Son, it is a matter of being competitive in the market and achieving the ideal cost structure, both of which is lacking in the facility-at-issue.

The manufacturing complex is next to the company’s Detroit headquarters. It supplies rear and front axle assemblies and steering linkages for light trucks. Son added that the complex was adversely affected by the shifting demand to more fuel-efficient vehicles.

The UAW has yet to comment on the report. Previously, there were eight factories in the complex, and as recently as 2007, it employed around 2,200 workers. Currently, there are only three plants existing. Chairman for American Axle, Richard Dauch, has come under fire from union leaders in recent years for an increasingly hard-line negotiating stance.

He was a former head of manufacturing at Volkswagen of America as well as Chrysler. He is also a long-time time champion of American manufacturing and the U.S. worker. His reputation took a beating in 2008 when 3,650 UAW members staged a bitter strike at five American Axle plants. The strike disrupted or halted production at 30 factories of GM, the company’s dominant customer.

Topics: american axle

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