UPDATE 1American Axle UAW labor talks near deadline
(Adds analyst comment, detail, byline)
By Kevin Krolicki
DETROIT, Feb 25 (Reuters) - American Axle %26amp; Manufacturing
Holdings Inc (AXL.N: Quote, Profile, Research) and the United Auto Workers face a final
day of contract talks on Monday before the midnight expiration
of the union’s current contract with the parts maker, a major
supplier to General Motors Corp (GM.N: Quote, Profile, Research).
Negotiators for the auto supplier and the union met on
Saturday and Sunday. Both sides declined to comment on the
talks, aimed at reaching a labor deal for more than 3,000
UAW-represented workers in Michigan and New York.
With the possibility of a strike or work stoppage looming,
American Axle has stockpiled parts for GM, which remains the
supplier’s largest customer and accounts for the majority of
its sales, a person familiar with the matter said.
A prolonged UAW strike against American Axle could disrupt
production of GM trucks and sport utility vehicles, analysts
have said.
Lehman Brothers analyst Brian Johnson said he expected
American Axle to emerge with a contract that would save $200
million annually by slashing wage rates by almost a third.
Johnson said unless the UAW agreed to sweeping wage
reductions, American Axle could threaten to close its Detroit
plant and ship the work on a next-generation axle for GM trucks
and SUVs to a factory in Mexico. “We expect significant
concessions,” he said in note for clients.
The UAW called brief strikes against GM and Chrysler LLC
last year in a historic round of contract talks with the
Detroit-based automakers that resulted in deals to sharply cut
their labor costs as they attempt to return to profitability. Continued…
