In 2008, 3,600 United Auto Workers went on a lengthy, 87-day strike against American Axle & Manufacturing at five of the company’s plants. At issue was the company’s desire to reduce its $70 per hour in labor costs it was paying to employ UAW workers.
While the UAW ultimately agreed to concessions in March 2008, the demand for AAM’s products still declined as the economy worsened in the summer of 2008.
Now, AAM (a former General Motors unit) has announced it is closing its Detroit plant, where is makes steering linkages and axles for trucks. As recently as 2007, the plant had employed 2,000 people, but the last 300 will be laid off when the current UAW contract ends in February, 2012.
According to the Detroit News, the demand for the plants products continues to be weak:
The company blamed the closing on waning demand for body-on-frame trucks and SUVs requiring the axles that the Detroit facilities make.
UAW Vice President Cindy Estrada oversaw negotiations to continue operations at the plant, which supplies axles and steering linkages to General Motors Co. for use in its full-size pickups.
“UAW members found dramatic cost savings to make the Detroit plant competitive, and instead of assigning enough work to keep the facility open and profitable, AAM is running from Detroit,” she said.
Company spokesman Chris Son said not all of the union’s details are factual and the decision to close the plant is final.
American Axle plants in Three Rivers, Mich., and Silao, Mexico, also supply GM pickup assembly plants. The supplier has not said where the Detroit work will move to. Three Rivers is closer to GM’s Flint and Fort Wayne, Ind., truck assembly plants but American Axle has already moved some work to Mexico, which supplies GM plants in that country as well as one in Arlington, Texas.
While the UAW says it is now open to having further discussions in an effort to keep the plant open, it appears that AAM has made its decision.