GM truck plant idle as American Axle workers strike

Our Corporate Bureau
01 March 2008

Detroit: General Motors Corp (GM) has had to idle a Michigan based Pontiac truck plant, as a direct result of a strike against parts supplier American Axle and Manufacturing Inc.

The idling plant is the first casualty of the strike by the United Auto Workers (UAW) against American Axle, the issue being wage cuts and benefit costs.

80 per cent of American Axle's sales come from GM. The company supplies axles for the automaker's large truck and SUV product line.

GM's Pontiac, Michigan plant makes the Chevrolet Silverado and GMC Sierra full-size pickup trucks.

According to industry analysts, a short strike at American Axle would allow GM an opportunity for better inventory management, as they would be able to liquidate inventories of unsold trucks and SUVs for the time the plants idle. GM's pickup truck inventory had ballooned in January, and this could well be the chance for the company to shrink those stocks, given the pressure faced by US vehicle sales. However, they caution that a prolonged strike could prove costly.

The UAW struck work shortly after midnight on Tuesday, rejecting demands by American Axle for wage cuts. American Axle is looking to bring down its hourly labour costs from around $70 per worker, to somewhere between $20 - $30. According to reports, this forms its basis to be competitive with rivals such as Dana Corp.