American Axle proposes cuts and buyouts to end 11-week strike

When the UAW went on strike against American Axle & Manufacturing in late February, analysts expected a settlement within days. The supplier of axles, driveshafts, and other related components to General Motors and other automakers had a stockpile of inventory on hand, and few expected the strike to affect production. However, as talks failed to bring workers back, the situation quickly went downhill. By early March, nearly GM 20 GM truck plants were threatening to idle or shut down. By late March, GM's car plants were feeling the effects. Earlier this month, it was GM who offered up to $200 million to help bring the strike to an end -- the automaker has suffered production stops or cut backs at 30 plants in North America as of last week.

Today, American Axle made an offer to the union to bring the 11-week strike to an end. It includes buyouts to workers who have been on the job for more than 10 years, retirement packages to senior workers, and payouts to ease salary adjustments as American Axle makes pay cuts to keep their U.S. operations competitive. The latest agreement will be voted on by union members in New York and Michigan tomorrow. Let's hope they come to terms, as the strike has already cost GM an estimated $800 million.

[Source: Bloomberg]