UAW Officials Throw in the Towel at American Axle

United Auto Workers officials ended the 12-week American Axle strike with a mid-May concessions-heavy settlement.

The new four-year contract will close two of the five struck plants and impose deep wage, benefit, and work conditions givebacks only marginally better than the offer that sent workers to the picket lines.

Read the PDF of the UAW- American Axle agreement here.

Video of UAW American Axle workers angrily leaving informational meeting in Detroit. Credit: Alan Pollock.

Watch the full-sized video here

Wages will be cut almost by half, starting at $10 an hour at one plant and $14.35 an hour elsewhere. Wages are frozen over the life of the contract, while pension benefits will end, to be replaced by a 401(k) retirement plan.

New hires will have lower shift premiums and higher medical co-pays.

The strike—the longest major auto industry walkout since the GM strike of 1970—was considered by many UAW activists to be a watershed moment in the fight to maintain union standards in the auto parts industry.

Despite initial angry reactions against the May 16 tentative agreement, the contract was voted up by 78 percent of the members on May 23.




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Members reactions to the settlement varied at first hearing of the proposed deal. Many strikers became openly angry at the main Detroit informational meeting May 18. Speeches from UAW officials drew scattered boos and heckling from the audience.

Wendy Thompson, a retired president of UAW Local 235, challenged the UAW officials strategy for the strike from the floor in a speech that drew applause.

Thompson and other editorial committee members of Shifting Gears, an American Axle rank-and-file newsletter, passed out thousands of copies of a leaflet (see below) urging strikers to reject the contract in the days leading up to the vote.

But once voting began, resignation, frustration, and a “take-the-money-and-run” attitude toward proposed buyouts and buydowns (payouts that transition workers to the new lower wage scale) were rampant.

A Lehman Brothers financial analyst forecast that the company, which posted a $37 million profit last year, would gain another $185 million annually from the workers’ concessions. He predicted that one-third of the 3,650-strong workforce will leave the company, to be replaced not “in the U.S. but in Mexico.” Production in American Axle’s Mexican plant doubled during the strike.

The contract passed by wide margins in four struck plants in western New York and Michigan. Close to 2,000 members of UAW Local 235 at the flagship Detroit Axle plant approved the contract by a slightly slimmer 71 percent margin May 22.

Shopfloor Newsletter Condemns Axle Settlement “Lowlights”

Shifting Gears, an American Axle rank-and-file newsletter, pointed out the following “contract lowlights” in a special leaflet urging strikers to reject the proposed contract:

  • different wage scale within Detroit Axle, with production workers ranging from $14.35 to $18.50 per hour
  • different wage scales among Detroit Axle ($14.35-$18.50), Cheektowaga ($14.35-$16.50) and Three Rivers ($10-$18) production workers, so that for future work the plants can be pitted against each other
  • no increase in wages over the life of the contract
  • instead of 5 percent premium, second shift would get 55 cents per hour; instead of 10 percent premium, third shift would get 80 cents per hour
  • pensions frozen as of January 2009; receive 3 percent of wage in a 401(k) plus matching additional contribution (But who will have extra money to put anything into it?)
  • combining skilled trades into only four classifications and reducing their hourly wage to $25-$26 (This is a proposed cut near and dear to CEO Dick Dauch, who would be the first executive to reduce skilled trades wages—the Big Three didn’t, and neither did Delphi.)
  • added health care costs: weekly “contributions” will start at $10 (individual)-$25 (family) and increase 3 percent per year, cost of living adjustment (COLA) sees 12 cents diversion each quarter for health care as well as higher up-front deductibles
  • overtime only kicks in after a 40-hour week, not after an 8-hour day
  • The unemployment support SUB fund of $18 million (donated by GM) is limited and underfunded
  • new hires would start at $11.50 per hour with no provision for COLA or even 5 percent in a 401(k); only to get dental after three years. Most other benefits would not match current workers: less shift premium, higher co-pays, etc.
  • increasing the number of workers each committeeperson represents
  • eliminating the right to strike during the term of the contract for issues such as health and safety, speed-up, sub-contracting, and bargaining in bad faith
  • decreasing the time frame the union has to counter the company’s plan to outsource from 150 days to 30 days
  • nickel and dimes a whole range of benefits including co-pays for generic drugs, capping health care for future retirees, tuition assistance
  • closing down Detroit Forge and Tonawanda Forge (while opening up a $10 an hour non-union plant in Oxford, Michigan)
  • removing Three Rivers from the no-plant-closing provision
  • shoving us out of the GM Umpire System, to be replaced by an inferior system of arbitration
  • eliminating some holiday and vacation time
  • taking some of our products out from under the protection of the successor clause (which ensure that the contract's negotiated terms continue in the event of a sale)
  • cutting relief time from 23 minutes to 15 minutes