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American Axle seeks to cut cost of labor

American Axle and Manufacturing is seeking to reduce labor costs at its plants in Buffalo and the Town of Tonawanda, among other sites, according to a published report.

Leaders of the auto parts supplier met privately with United Auto Workers officials in Detroit on Tuesday, where American Axle leaders said they needed to lower wage and benefits expenses costs at some of its U.S. plants in order to remain competitive, the Detroit News reported. The story, citing unidentified sources, mentioned two Buffalo-area plants as among five sites where American Axle wants to reduce costs.

Neither side would comment on Wednesday on the meeting.

"Our discussions with our stakeholders are of a private and confidential nature," said Renee Rogers, an American Axle spokeswoman.

"It was between the leadership of American Axle and the leadership of the UAW," said Kevin Donovan, the UAW's Buffalo director.

The published report said the talks concentrated on operations at five plants that American Axle acquired in 1994 from General Motors, including a gear and axle plant on East Delavan Avenue and a forge in the Town of Tonawanda. The other facilities that are part of the discussion are in Michigan.

The story said American Axle might push for a "multitier" wage system at plants it acquired from GM, in exchange for pledging to assign new work to those plants.

American Axle reported earlier this month it has a $1.4 billion backlog in new and incremental business that will launch from this year through 2012. But some of that work could go overseas: American Axle plans to break ground this spring on a manufacturing plant in China.

The Buffalo area is also home to a third American Axle operation: a machining plant in Cheektowaga which opened in 2000. That site was established under a separate agreement, with a wage structure different from the other two area plants.

American Axle in its third quarter reported net income of $19.3 million. But its profits fell 47 percent from a year earlier. American Axle is scheduled to report its fourth-quarter and full-year results on Friday.

The UAW in 2004 agreed to accept what was described as a "two-tier" wage system at the ex-GM plants American Axle hired, applying to pay for new hires, but such a system has not taken effect at the Buffalo or Tonawanda plants.

Donovan said about 180 workers are on layoff from the Cheektowaga and Tonawanda plants, and an estimated 300 workers are on layoff at the Delavan Avenue plant. He said he expects the figures to increase soon, as General Motors prepares to idle a production plant in Oklahoma City, Okla., this month. GM is American Axle's largest customer.


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