GM plants to resume production as strike at American Axle ends

19 May 2008

Detroit: A number of General Motors plants that were forced to idle or shut down production because of an 11-week long strike at American Axle, a parts supplier, will now be able to revert back to their original production schedules.

American Axle and Manufacturing Holdings Inc. and its worker's union, the United Auto Workers, have reached a tentative agreement that should see the return of workers to the assembly lines.(See: GM truck plant idle as American Axle workers strike)

The strike at American Axle had shut down production at plants at General Motors, which made large pick-up trucks and sport-utility vehicles, (See: UAW strike at American Axles shuts GM plant in Detroit)

Though the strike impacted the American auto majors first quarter profits in its home market, the impact was somewhat buffered by the slowdown in auto sales in the country on higher gasoline prices, and a slowing don of the economy.

The deal is set to be ratified through a vote scheduled at one of the plants for Monday, and another at a second plant for three days later. In a statement, UAW President Ron Gettelfinger commended members at American Axle for having displayed extraordinary solidarity during the strike, and said the bargaining committee worked very hard to achieve the tentative agreement. Around 3,650 employees represented by the UAW at five American Axle plants in Michigan and New York were on strike since 26 February.

The announcement of the deal follows an announcement by GM a couple of weeks ago, saying that it would chip in with $200 million to settle the strike, and help fund buyouts. Reports suggest that the deal clincher was an additional $18 million (over the $200 million) from GM during the final hours of negotiations between American Axle and UAW. According to UAW local President Adrian King, the $18 million sweetened the deal enough to send it to vote since the extra money made sure that layoff pay could be part of the deal.

Part of the tentative agreement are proposed buydowns of around $105,000 for workers who decide to stay, and buyouts of around $140,000 for those who decide to leave. The deal also includes wage reductions, closure of a forging plant in Detroit, and a plant forging plant near Buffalo, New York.