GM Supplier American Axle to Resume Labor Talks

American Axle & Manufacturing Holdings Wednesday said it would resume contract talks with striking workers as main customer General Motors warned that work at another assembly plant would have to be slowed if the strike against its supplier continued.

AP

Talks between American Axle and the UAW had been at a standstill recently, but the supplier said it and the union have agreed to resume negotiations at noon Thursday.

At American Axle, about 3,600 UAW-represented workers in Michigan and New York went on strike Feb. 26 against the supplier. It relies on GM for almost 80 percent of its sales.

Detroit-based American Axle was spun off from GM in 1994.

It has said it needs the UAW to accept steep concessions on wages in order to keep production in the United States. The UAW has been largely silent on the talks, but in a March 1 statement said it was "fighting to preserve good-paying U.S. manufacturing jobs."

"Nobody likes a strike, but the company continues to make unreasonable and unnecessary demands which attack our wages, pensions and health care -- and they haven't provided us the information we need to evaluate their proposals," Erv Heidbrink, president of UAW Local 2093, said in the statement.

The local represents about 800 UAW members at an American Axle facility in Three Rivers, Michigan.

Lehman Brothers analyst Brian Johnson said Wednesday in a research note to clients that it appeared American Axle would emerge from the talks with lower-than-anticipated labor costs, a positive factor for earnings and the stock price.

American Axle appeared to be targeting a reduction of 1,000 U.S. workers through buyouts, and that the UAW had agreed to that concession but not the size of the incentives, Johnson said. Lower cash wages are also being discussed.

GM said an eighth plant, which builds sport utility vehicles in Wisconsin, will be affected next week as the impact from the strike widens for the No. 1 U.S. automaker.

GM's Janesville, Wisconsin, assembly plant will operate on shortened shifts next week, the automaker said on a company Web site. The plant builds the Chevrolet Tahoe and Suburban as well as GMC Yukon and Yukon XL SUVs, and employs almost 2,300 hourly workers.

GM said that if the strike lasts beyond next week, it will evaluate other work schedules for the Wisconsin plant.

On Tuesday, GM said it expected to close its Toledo, Ohio, transmission plant next week. The eight affected GM plants combined employ almost 17,400 hourly workers, or almost 22 percent of the automaker's blue-collar work force in North America.

Analysts have said a short work stoppage could allow GM to run down inventories of trucks and sport utility vehicles but have cautioned that a longer disruption could be costly.

Shares of American Axle were down 3 cents at $21.43 while those of GM were up 3 cents at $23.10 in morning trade on the New York Stock Exchange.

Copyright 2009 Reuters. Click for restrictions.