Latest News - August 2011

August 18, 2011
American Axle to Close Plant in Blow to UAW
Source: The Wall Street Journal
By: Jeff Bennett

DETROIT–American Axle & Manufacturing Holdings Inc. dealt the United Auto Workers a second blow Thursday by announcing the closure of its New York gear-making plant after union rank-and-file members failed to ratify a new contract late last month.

The Cheektowaga plant, employing about 100 hourly and salaried workers, will be shut sometime after Feb. 25, American Axle spokesman Christopher Son said. The announcement comes a month after the company said it will close its Detroit plant after workers there failed to agree to wage cuts. That closure will throw about 300 people out of work.

American Axle’s decision underscores the continued pressure on the UAW to protect job security in the U.S. while dealing with company demands to lower wages so they can compete with their foreign rivals. Job security is one of the key issues the UAW is facing in its current labor talks with Ford Motor Co., General Motors Co. and Chrysler Group LLC.

Negotiations in Cheektowaga broke down July 31 when UAW Local 846 members voted 98% to reject what American Axle said was its last, best and final proposal. Mr. Son said the company needed a commitment by the union to maintain the hourly work wage at between $15 and $17 an hour. The union, in a statement Wednesday, said the company demanded more concessions. Mr. Son declined to provide more details.

“This is an indication that hard-working people are sick of constantly helping companies through concessions and back to profitability and companies refusing to share in that,” UAW Vice President Cindy Estrada said in Wednesday’s statement.

American Axle generated a profit of $115 million last year.