American Axle rejects UAW offer, talks continue

DETROIT (Reuters) - American Axle & Manufacturing Holdings Inc <AXL.N> on Thursday rejected a United Auto Workers contract proposal as uncompetitive and said talks aimed at ending a six-week strike at five U.S. plants would continue.

The proposal was "a slight improvement," but the total cost remained about 200 percent above the market rate for American Axle's rivals in the U.S. auto parts sector, the company said.

A UAW representative could not be reached for comment.

The strike also has forced General Motors Corp <GM.N> to at least partly idle 30 North American plants and thousands of hourly workers. GM accounts for about 80 percent of American Axle's annual revenue.

The UAW presented the new contract offer on Wednesday as the two sides resumed full bargaining for the first time in a month. Some 3,650 UAW-represented workers at American Axle went on strike February 26 at five U.S. plants.

"If the UAW continues to refuse to make realistic economic proposals, (American Axle) will be forced to consider closing these facilities," the company said in a statement.

A market competitive agreement would allow the plants to bid competitively for new business and permit continued company capital investments, American Axle said.

American Axle said it has offered buyouts for UAW workers who would prefer to leave the company, or annual cash payments to workers who accept lower wages and benefits to cushion the blow of steep labor cost concessions.

Those proposals are similar to those the UAW agreed to with GM, Chrysler <CBS.UL>, Ford Motor Co <F.N> and Delphi Corp <DPHIQ.PK> previously, American Axle said.

The strike covers plants in Michigan and New York that were the original U.S. facilities an investor group led by American Axle Chief Executive Dick Dauch bought from GM in 1994.

The UAW and American Axle negotiated aggressively after the strike began, but full talks broke off on March 11 and the union said American Axle had not provided enough financial details to evaluate its demand for concessions.

Light discussions continued in the weeks after talks broke off and American Axle gave the union additional financial information last week under a confidentiality agreement.

Dauch and UAW President Ron Gettelfinger met face-to-face on Monday for the first time in months and the two sides agreed to resume full bargaining later in the week.

(Additional reporting by Kevin Krolicki; editing by Carol Bishopric)