Axle: Benefits stall UAW talks
Supplier calls health care, jobless payments primary issues, counter to union's comments.
After weeks of battling over wages and job security, American Axle management said Tuesday that health care and unemployment benefits are the two primary issues stalling talks in the United Auto Workers' strike against the Detroit-based automotive supplier.
That runs counter to UAW President Ron Gettelfinger's recent comments indicating that American Axle & Manufacturing Holdings Inc.'s proposal last week to close an additional plant, and demands for deep wage cuts, caused talks to derail.
The company said there are only a few matters standing in the way of a tentative agreement, but the benefit issues have slowed talks since Sunday.
More than 3,600 American Axle workers have been on strike since Feb. 26.
Supplemental Unemployment Benefits, or SUB, is a program that pays workers a majority of their wages when they are laid off. Detroit's Big Three automakers offer the benefits, but it's rare among suppliers, American Axle said in a statement late Tuesday.
"SUB is a contract provision that is driving work out of AAM's original U.S. locations," the statement said. "Paying associates who are not working is an uncompetitive burden that AAM cannot bear."
Supplemental unemployment benefits, when combined with state unemployment, pays American Axle workers about 85 percent of their pay while on layoff.
The company said the UAW also is demanding that current health care benefits be maintained -- a plan American Axle says costs double what its unionized competitors pay.
UAW spokesman Roger Kerson did not return calls Tuesday.
The company now proposes eliminating the supplemental unemployment benefits, after previously asking that they be capped at 52 weeks, said Dana Edwards, shop chairman at UAW Local 235, which represents workers in Detroit. The benefits are important because General Motors Corp., American Axle's largest customer, recently cut its truck production, which could cause the Detroit plant to lose its third shift once the strike concludes, Edwards said.
"You'd have people going from $200 a week in strike pay, to less than $400 a week in what Michigan pays in unemployment," he said.
The unemployment benefits long have been a contentious point in contracts, but make it "possible for workers to survive well on layoff," said Wendy Thompson, the retired former president of Local 235.
She said the benefit is particularly important because American Axle workers gave up the jobs bank program in their contract four years ago. At Detroit automakers, which still have jobs banks, workers are paid 100 percent of their wage while on layoff.
UAW officials have said the company is proposing wage cuts of $5 to $14 per hour and intends to close Detroit Forge and two plants in New York, leaving two of six striking plants operating.
American Axle publicly unveiled some details of its proposal for the first time Tuesday:
• The company will pay a $5,000 signing bonus to all its UAW workers upon ratification of the contract.
• It will offer buyout packages of up to $140,000 for workers to leave the company.
• Workers who stay will get a bonus to help them adjust to lower wages, known as a buydown.
The company said the buydowns will be on par with those paid at suppliers Delphi Corp. and Magna International Inc., which paid bonuses of $105,000 and $87,500, respectively, over several years.
The company reiterated that it will invest $200 million in the striking plants once the walkout ends. American Axle spokeswoman Renee Rogers would not comment on plant closures.
Proposing to end supplemental unemployment benefits could suggest some brinkmanship on the part of American Axle, said Harley Shaiken, labor professor at the University of California, Berkeley.
"If you say you're going to take SUB away, and then you don't, it appears as if the union won a victory when before it was just maintaining the status quo," he said. "It doesn't mean it's not a serious proposal, but could also be a bit of theatrics."
American Axle said deteriorating sales of trucks and SUVs, for which the supplier provides parts, also is affecting the talks.
"It is a market reality that AAM and the International UAW must jointly address," the statement said.
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