The United Auto Workers (UAW) launched a strike yesterday against Detroit-based American Axle and Manufacturing Holding Inc (AAM), a key supplier to both General Motors Corp (GM) and Chrysler LLC.
The strike began shortly after midnight after the company and union negotiators reached an impasse over wage cuts for 3,600 company employees based in Detroit and near Buffalo, New York, officials from UAW Local 235 in Detroit confirmed.
"Yes. We are on strike," a spokeswoman said.
Earlier, Renee Rogers, a spokeswoman for American Axle, said the company was seeking to align wages at its US operations with those that now prevail at other automotive suppliers.
"Companies in our competitive set in the US are paying between US$20 and US$30 per hour while we're paying US$65 per hour" for both wages and benefits, Rogers said.
CONCESSIONS
The UAW has made significant concessions in talks with several other companies recently but a settlement on the terms outlined by American Axle officials would require deep pay and benefits cuts, union members have said.
The union waged brief, largely symbolic strikes at GM and Chrysler last year but walkouts ended quickly.
However, union militants at American Axle plants have been campaigning aggressively against concessions, which they say are unwarranted since the company has found the resources to pay executives large salaries and bonuses.
In addition, American Axle, a former GM subsidiary, has been expanding overseas in China, Thailand and Mexico while phasing out operations in Buffalo.
CLOSURES
The strike could force GM to close several truck assembly plants. In March 2004, a brief strike at American Axle forced GM to close assembly plants in Pontiac, Michigan and Fort Wayne, Indiana, and to curtail production at a third plant in Flint, Michigan.
GM plants in Janesville, Wisconsin; Arlington, Texas; and Oshawa, Ontario in Canada could quickly face shortages. GM purchases more than 70 percent of parts made by American Axle, which include drivetrain and chassis systems and related components for light trucks, sport utility vehicles and crossovers.
Chrysler's pick-up truck production is also threatened by the strike, observers said.
American Axle appears to have stockpiled some parts to weather a two or three day strike without jeopardizing production at GM or at Chrysler LLC, which is its other major customer, union sources said on Monday.
The current American Axle contract covers 3,650 employees at American Axle plants in southeastern Michigan.
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