American Axle to close its plant in New York

Article by Christian A., on August 30, 2011

American Axle & Manufacturing Holdings Inc. announced that the Cheektowaga, N.Y. plant will be closed just one day after the union rejected the contract offer. Two months ago, American Axle, a former General Motors Co. unit, revealed that its Detroit manufacturing complex will be closed as it had failed to reach a labor deal with the UAW. The New York plant has 66 employees that the UAW represents and as many as 34 salaried workers.

The UAW said that talks broke down as the workers turned down the offer of American Axle. In a statement to Crain's Detroit Business, Chris Son, director of corporate and investor relations, said that the customer production volumes for the programs at this facility were “significantly reduced” by the shifts in market demand toward more fuel-efficient passenger cars and crossover vehicles.

He added that several customer assembly plants that the Cheektowaga manufacturing facility supported have been shut down.

As a result, American Axle is required to consolidate, rationalize and reposition production capacity in order to adjust to the new, lower market requirements for its North American products.

Last June, Son informed Crain’s that American Axle persisted in seeking a competitive labor contract with the UAW that would be similar to the contract reached at its Three Rivers plant located in southwest Michigan.

Axle aimed to lower compensation to $30 an hour from $45 at its Detroit plant, which is probably what the supplier wanted for New York. Son explained that Axle sought to be market-competitive and to attain a suitable cost structure.

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