Strike at American Axle idles or slows 27 GM plants

Two weeks ago, the United Auto Workers (UAW) (Detroit, Michigan) walked off the job at five American Axle & Manufacturing Incorporated  (Detroit) facilities in New York and Michigan. About 3,600 union members are affected by the walkout as the union presses for more favorable conditions during contract negotiations with the tier supplier. Almost immediately, General Motors Corporation  (Detroit) was forced to idle its Pontiac, Michigan, truck assembly plant, which produces the Chevrolet Silverado and the GMC Sierra pickup truck.

Within days, GM had idled four more plants in Flint, Michigan; Fort Wayne, Indianan; Oshawa, Ontario; and Moraine, Ohio. However, because of the length of the strike at American Axle and the resulting parts shortages, GM has been forced to idle or at least slow down production at 27 of its plants in North America, resulting in more than 37,000 hourly workers being sent home.

American Axle, spun off from GM in 1994, is asking the union to reduce wages by at least $14 per hour in order for the supplier to remain competitive and head off potential permanent closures of additional facilities. American Axle, which is a major supplier of axles and other components to GM's light truck line of vehicles, had already closed one of its facilities in Buffalo in 2007.

This strike and its resulting temporary layoffs are just another blow to the American automotive industry, which has been struggling for the last several years to keep its collective head above water. GM, Ford Motor Company  (Dearborn, Michigan) and Chrysler LLC (Auburn Hills, Michigan) have all been posting annual losses for the past two to three years and are in the midst of major reorganization efforts that have included buyouts and early retirement packages to tens of thousands of workers, closing obsolete or redundant facilities, and eliminating shifts.

At the same time, foreign automakers have been reaping the benefits of an automotive industry in turmoil by grabbing larger portions of the North American market share each year, with Toyota Motor Manufacturing North America  (Torrance, California) poised to take firm control of the No. 1 overall sales position in 2008. Although the Detroit Three are consolidating operations in North America, foreign automakers are expanding. Toyota is nearing completion of a new assembly plant in Oshawa and is beginning construction on an assembly plant in Mississippi. KIA Motors America (Irvine, California) is beginning construction on an assembly plant in Georgia, and American Honda Motor Company Incorporated  (Torrance) is nearing completion of an assembly plant in Indiana.

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