American Axle to Close N.Y. Gear Plant

Aug. 21, 2011
UAW rejects wage, benefit concessions in "final" contract proposal

American Axle & Manufacturing Holdings Inc. has told the United Auto Workers it plans to close its Cheektowaga, N.Y., gear plant now that union members there rejected a new contract proposal. It’s the second such decision by AAM in recent weeks. Both the New York pant and an axle plant in Detroit are due to close after the current contract expires in February 2012.

The news was announced by the UAW, which said negotiations toward a new contract ended July 31 when UAW Local 846 members voted by a 98% margin to reject an offer that American Axle called its "last, best, and final proposal."

American Axle has not commented on the developments. The UAW states that American Axle seeks concessions in hourly wages and benefits in the new contract.

"This is an indication that hard-working people are sick of constantly helping companies through concessions and back to profitability and companies refusing to share in that," stated UAW vice president Cindy Estrada.

"Here is a business that started out as an American company providing good-paying jobs to 6,000 employees,” she continued, speaking of American Axle. “As a result of the hard work of these employees, it has grown to an international company with 32 factories worldwide," said Estrada. "All of this success was achieved off the backs of the original 6,000 hard-working Americans."

American Axle is an integrated global supplier of powertrain systems, and related components and modules, and chassis systems, for trucks, sport utility vehicles, passenger cars, and crossover vehicles. It has plants in Indiana, Michigan, New York, and Ohio. The Cheektowaga plant, near Buffalo, machines differential pinions and side gears.

The current contract between AAM and the UAW was the product of a bitter, three-month strike in 2008 in which the manufacturer achieved wage reductions and capacity consolidation. In 2010, a federal arbitrator ruled for the UAW in its complaint that American Axle violated the 2008 contract by assigning production to its axle complex in Mexico. The arbitrator ordered the company to provide restitution to affected workers.

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