American Axle UAW Contract Expires at Midnight, Accord Expected

The 4-year UAW contract covering 7,500 workers at Detroit-based American Axle & Manufacturing Inc. will expire at midnight tonight. Negotiations between the two sides began in December but have yet to produce an agreement. Two UAW officials, who asked not be named, said a tentative agreement should be reached today.

by Jeffrey McCracken
Detroit Free Press Business Writer

DETROIT — The 4-year UAW contract covering 7,500 workers at Detroit-based American Axle & Manufacturing Inc. will expire at midnight tonight. Negotiations between the two sides began in December but have yet to produce an agreement.

Two UAW officials, who asked not be named, said a tentative agreement should be reached today.

“Everything is on track to be done by the deadline,” said one UAW official. “That’s my expectation.”

If an agreement is not reached, workers can vote for an extension to continue bargaining or they can strike. Among the key bargaining issues were wages, health-care costs and job security, said the UAW sources.

Recently, American Axle-UAW workers at a plant in Three Rivers agreed to a three-tier wage system, which covers only the 1,000 workers at their plant. It is believed to be the first such agreement in UAW history.

UAW and American Axle officials wouldn’t say whether the national UAW-American Axle contract talks would also create a three-tier wage plan.

Under the Three Rivers plan, first-tier workers, who were hired before 2000, can earn up to $26 an hour. Second-tier workers earn $13.50 to $17 an hour, plus get the same top-shelf health-care benefits as their first-tier coworkers.

New workers will make $13.50 an hour, get no cost-of-living adjustments for three years and must pay more for their health-care coverage.

Two-tier wage agreements, let alone three-tier deals, were once anathema to the UAW. But last year, the union agreed to a two-tier wage system for workers at Visteon and Delphi.

The UAW, Visteon and Delphi are expected to announce their second-tier wage structure by the end of March. Currently, UAW workers at Delphi and Visteon receive pay equal to workers at the automakers the companies were spun from — General Motors and Ford, respectively — meaning a typical wage around $24 an hour.

Visteon and Delphi workers start around $18 an hour, while those with higher seniority or in skilled-trade posts can earn $30 an hour.

By comparison, UAW workers at rival suppliers such as Lear and Johnson Controls typically make $12 to $18 an hour, depending on skill level, experience and where the plant is located.

The American Axle-UAW contract that expires tonight covers hourly workers at 12 American Axle plants in Michigan, Ohio and New York. American Axle has about 3,500 hourly UAW workers at two plants in Detroit.

American Axle was formed in 1994 after former Chrysler executive Richard Dauch led a buyout of five foundering GM axle plants. GM agreed to commit certain truck business to American Axle, which makes chassis and driveline systems.

American Axle, which had 2003 sales of $3.7 billion, makes parts for GM’s Hummer H2, GMC Envoy and GMC Canyon, among other models. It reported 2003 profits of $197.1 million, up from $176.1 million a year ago.

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