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May 9, 2008 |
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AMERICAN AXLE: Gets $200 Mil. Aid from GM to Resolve Labor Dispute American Axle & Manufacturing Holdings Inc. will receive upfront financial support from General Motors Corp. capped at $200 million to help fund employee buyouts, early retirements and buydowns to facilitate a settlement of the work stoppage, according to GM filing with the Securities and Exchange Commission. As reported in the Troubled Company Reporter on April 24, 2008, the strike called by the UAW union at Axle's original U.S. locations continues into its 57th day on Tuesday. Approximately 3,650 associates are represented by the UAW at these five facilities in Michigan and New York. AAM and the UAW worked effectively last week with the objective of reaching a new collective bargaining agreement for the original U.S. locations. Tentative agreements were achieved on many issues and AAM was encouraged by the progress. Although AAM has made several economic proposals to the UAW with "all-in" hourly wage and benefit packages that were considerably higher than the market rate of AAM's UAW-represented competitors in the U.S., the UAW has repeatedly rejected these economic proposals. AAM needs a U.S. market competitive labor agreement for the original U.S. locations. This is necessary because the UAW previously negotiated market competitive labor agreements with many of AAM's U.S. competitors in the driveline market segment. This includes Dana, FormTech, Chinese-owned Neapco and Indian- owned Bharat Forge. The "all-in" wage and benefit package granted by the UAW to these companies averages approximately $30 per hour. In order for AAM to be able to compete for new business and sustain employment at the original U.S. locations, the UAW must offer AAM economic terms and conditions that are comparable to those it has already granted to AAM's competitors. The UAW's latest economic proposal to AAM dated April 14, 2008, included an "all-in" wage and benefit package that is almost double the market rate established by the UAW with AAM's competitors. The TCR reported in March 2008 that GM president and chief operating officer Frederick A. Henderson said that although many of its assembly plants have been partially or fully shut down by the strike of United Auto Workers union members at Axle, GM won't interfere with the parties' labor dispute. Mr. Henderson added that GM were not losing sales because of the strike, which started on Feb. 26, 2008, following expiration of a four-year master labor agreement. However, he said, if GM was struggling because of the union protest, the company would be one of those sitting on the negotiation table. According GM's quarterly results filing, Axle's work stoppage unfavorably impacted GM North America earnings by $800 million. GM has about 30 facilities affected by the strike as the supplier attempts to negotiate with the union. About GM Headquartered in Detroit, Michigan, General Motors Corp. (NYSE: GM) -- http://www.gm.com/ -- was founded in 1908. GM employs about 266,000 people around the world and manufactures cars and trucks in 35 countries. In 2007, nearly 9.37 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. About American Axle Headquartered in Detroit, Michigan, American Axle & Manufacturing Holdings Inc. (NYSE:AXL) -- http://www.aam.com/ -- and its wholly owned subsidiary, American Axle & Manufacturing, Inc., manufactures, engineers, designs and validates driveline and drivetrain systems and related components and modules, chassis systems and metal-formed products for light trucks, sport utility vehicles and passenger cars. In addition to locations in the United States (in Michigan, New York and Ohio), the company also has offices or facilities in Brazil, China, Germany, India, Japan, Luxembourg, Mexico, Poland, South Korea and the United Kingdom. * * * As reported in the Troubled Company Reporter on April 4, 2008, Moody's Investors Service placed American Axle & Manufacturing Holdings, Inc.'s Ba3 Corporate Family Rating under review for downgrade. |
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