American Axle workers wait for word of strike settlement

In this June 14, 2006 file photo, the General Motors world headquarters in Detroit, is seen from Windsor, Canada. General Motors Corp. says it has bought its previously leased headquarters in downtown Detroit's towering Renaissance Center for $626 million. (AP Photo/Carlos Osorio, File)

DETROIT—There's hope among the striking workers outside of American Axle's hulking Detroit factory complex, but along with it come skepticism and fear.

The hope stems from General Motors Corp.'s surprise announcement Thursday that it will throw in $200 million to help end the 10-week walkout, which has crippled production of GM pickup trucks and sport utility vehicles.

The skepticism and fear come from workers who've spent hours of picket line duty talking about American Axle's quest to cut wages in half in order to match the labor costs of its North American competitors.

On Friday, everyone was waiting for news of what they hoped would be a sweeter deal than the ones they've been told about before.

"The seasons changed and we're still out here," said worker Jerome Lockhart, 34, of Romulus, just west of Detroit, who never expected the strike to last as long as it has.

The walkout by 3,600 workers against American Axle and Manufacturing Holdings Inc. began Feb. 26, back when it was cold and snowy on the walks outside the factories just north of Downtown Detroit.

Now Lockhart, sitting under a canopy for shade on a warm spring Friday, is thinking about how his family will get by if his pay goes from the present $28 per hour to $17, the last offer from the company before GM got involved.

"It's really going to be a difference in lifestyle," said Lockhart, whose wife works as an accountant. "It's hard to really say you're ready for it."

American Axle is a small company that gets 80 percent of its business from GM. It makes axles, drive shafts and stabilizer bars for pickup trucks such as the Chevrolet Silverado, GM's top-selling vehicle.

Many of its U.S. competitors won deals from the United Auto Workers to pay newly hired workers about $14 per hour. American Axle says it wants the same contract.

But its workers say they won't take that big of a pay cut from a company that made $37 million last year. The resulting standoff caused a parts shortage that forced GM to fully or partially close 30 factories. Other auto parts suppliers also had to lay off workers.

Industry analysts say the UAW expected GM to step in once its plants went down, but high gasoline prices blew up that strategy. People stopped buying pickups and SUVs, so GM still has enough of the big models to meet demand.

The union, the analysts say, went to its plan B, using local contract issues to strike GM at the heart -- factories that make its popular new crossover vehicles and the hot-selling Chevrolet Malibu mid-size sedan. The union, which has threatened strikes at other factories over local contract disputes, denies any link with American Axle.

Local plants negotiate their own operating agreements separate from the national contract, which was settled last year.

Just before GM's announcement that it would kick in the $200 million, a UAW local that had threatened to strike at a transmission plant in Warren reached a deal. Later Thursday, a local at a stamping plant near Grand Rapids also settled.

GM spokesman Dan Flores said Friday that negotiations continue at the factory near Lansing that makes crossovers such as the Buick Enclave, and the Malibu plant in Kansas City, Kan.

Talks also continued at American Axle, where workers were wondering how the company will package the money from GM.

American Axle said Thursday that GM's cash is contingent on "expedited resolution" of the strike, but Flores said he was unaware of any specific deadline set by the automaker.

"We're hopeful this gets resolved sooner than later," he said.

GM said the strike cost it $800 million in the first quarter, and through April, caused it to make about 230,000 fewer vehicles.

GM said in a federal regulatory filing that the American Axle money would be used for buyout and early retirement packages, and for temporary annual payments called "buydowns" that would help workers make the transition to lower pay.

Strikers who aren't near retirement and want to stay with American Axle say they're waiting for the numbers to see if they can keep making their monthly payments under the new deal. Union officials told workers last week that $90,000 in buydowns were on the table, paid out over three years.

Lockhart and his wife have crunched the numbers to see if they can put that money into their mortgage, pay off their car loans and continue to keep the same standard of living.

Other workers say there's no way they can make the mortgage payments and take a 30 or 50 percent pay cut, especially after being on strike for so long.

"The consensus is by getting this money, we've got three years to look for a job," says worker Steve Stewart, 51, of China, Mich., who has 31 years with the company.

American Axle spokeswoman Renee Rogers and UAW spokesman Roger Kerson would not comment on what's being discussed in negotiations.

Lockhart says all the talk about pay cuts and buyouts is upsetting, but he has to prepare for the inevitable. He doesn't want a pay cut, but he also wants to go back to work.

"I guess that's what it's going to be," he said. "I refuse to stay mad and make being out here even worse."

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On the Net:

General Motors Corp.: http://www.gm.com

United Auto Workers: http://www.uaw.org

American Axle and Manufacturing Holdings Inc.: http://www.aam.com