American Axle & Manufacturing will close its Cheektowaga plant early next year, dealing a blow to the region's manufacturing base and ending the company's once-thriving presence in the Buffalo Niagara region.
The decision will eliminate 86 hourly and salaried workers' jobs at the gear-making operation, which opened in 2000. The Detroit-based auto parts supplier said the closing will occur on or after Feb. 26 when the current labor agreement expires.
It will mark the end of the company's run in Western New York. In 2000, the company had 2,800 employees at three plants in Erie County.
The company had told workers it needed a "market competitive labor agreement" from them, in light of reduced production of light trucks that the plant makes parts for, as well as a lack of new work to help cover the facility's operating costs.
American Axle had sought a similar agreement from workers at a plant in Detroit. When it failed to obtain a deal, it announced that site would close, also in February.
The Cheektowaga plant's 66 hourly workers, represented by United Auto Workers Local 846, in late July rejected what American Axle termed its "last, best and final proposal," with 98 percent of ballots cast against it.
American Axle called the closing a "very difficult but necessary business decision." Executives from Detroit came to the plant Thursday to deliver the news, said Christopher Son, an American Axle spokesman.
Details of the shutdown, including where the work will be shifted, are yet to be determined, Son said. It is possible the work could be moved to other American Axle operations in Ohio or Indiana, but Mexico is also a possibility, he said.
The UAW, in a statement prior to the shutdown announcement, contended American Axle "demanded more money and benefits from workers, who have already taken concessions but were willing to negotiate a contract that helps keep jobs in the community."
"The men and women in Cheektowaga stepped up to the plate and made huge sacrifices when the company was in trouble," said Scott Adams, director of Amherst-based UAW Region 9.
"Clearly, American Axle CEO Dick Dauch is more concerned with advancing his pay from millionaire to billionaire status at the continued expense of his employees."
The UAW criticized American Axle's contract demands in light of the company's improved financial picture. American Axle's second-quarter profits soared to $47.9 million, or 65 cents per share, from $25.3 million, or 34 cents per share, a year ago.
Cindy Estrada, a UAW leader, said the recent "no" vote captured the workers' frustration.
"This is an indication that hardworking people are sick of constantly helping companies through concessions and back to profitability and companies refusing to share in that," said Estrada, who directs the union's American Axle department.
Son contended that while the company did want to reduce overall labor costs, it did not seek to reduce workers' base pay. He also said the company's proposal offered to move some work to the Cheektowaga plant from Mexico, which he said would have created jobs.
Arthur Wheaton, an automotive industry expert at Cornell University's School of Industrial and Labor Relations in Buffalo, called the shutdown "bad news" but "certainly no surprise."
American Axle has scaled back its U.S. manufacturing while adding operations overseas, he said. The loss of the other two American Axle plants in the Buffalo area did not help the Cheektowaga plant's long-term outlook, he added.
"There was nothing nearby for them to supply," he said.
Wheaton credited local manufacturing workers with making the plant last as long as it did. "It kept jobs in Buffalo for a longer period of time," he said.
The shutdown of the Cheektowaga plant will close a chapter in local automotive manufacturing history that began in 1994, when the newly formed American Axle acquired a portion of General Motors' operations here and in Michigan.
Its local presence started with a gear and axle plant on East Delavan Avenue and a forge in the Town of Tonawanda. The company poured new investment into the plants, quelling UAW members' fears that they could be closed.
The idea for the Cheektowaga plant came from local union and management officials at the Tonawanda forge. They persuaded the company to bring "in house" some machining work being handled for the forge by an outside contractor.
American Axle poured about $40 million into acquiring and equipping a vacant former Builders Square store. The project was hailed as an innovative approach for adding manufacturing jobs.
The plant, which adopted a lower-cost labor structure, was announced in 1999 and began operating the following year.
But American Axle in recent years went through a wrenching period, marked by an 87-day day strike in early 2008. It ended up closing its Buffalo and Tonawanda operations. Workers criticized the company for shifting more of its operations out of the country -- complaints the UAW repeated this week.
The loss of the Cheektowaga plant is another blow to the region's manufacturing base, traditionally a source of good-paying jobs. Less than a two-mile drive from the Walden Avenue plant, Quad/Graphics is winding down operations at a printing plant formerly known as Quebecor World Buffalo. About 350 employees are still working there, while 80 others have left through job cuts, retirements or voluntary departures.
Despite the local loss of American Axle, Buffalo Niagara remains home to two General Motors production plants and one Ford Motor Co. stamping facility.