American Axle strike causes GM to idle four truck plants

It turns out that the three-day inventory of parts that was stockpiled by OEM supplier American Axle is not nearly enough to weather a strike by the United Auto Workers union. The strike began early Wednesday, and though it's only Friday, General Motors is preparing to shut down its second, third and fourth assembly plant on account of parts shortages from American Axle. GM shut down its Pontiac, MI truck plant yesterday, which will be followed by the Fort Wayne, Flint and Oshawa plants, which build the Chevy Silverado and GMC Sierra, at midnight tonight. That's a lot of truck plants off-line, but there's one more in Silao, Mexico that builds the Suburban, Tahoe, Yukon XL and Cadillac Escalade and ESV that will remain running for now.

Unlike the strikes levied by the UAW against GM and Chrysler during contract negotiation talks last year, the current strike against American Axle is no token bargaining tool that will end before the paint on the picket signs is dry. Despite that, it does give GM an opportunity to lower its inventory of unsold trucks and SUVs, so for the time being the giant automaker isn't panicking. The strike has the potential to wane on, however, considering that the UAW is deeply committed to fighting against a proposed cut that would trim American Axle's hourly labor costs from $70 to between $20 and $30. The supplier wants to recoup its $3 billion investment in its plants, but the workers are fighting to ensure that it's not at their expense.

[Source: Automotive News, Photo by Bill Pugliano/Getty]

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