UAW urges adoption of cost-cutting Axle deal

By Kevin Krolicki and Soyoung Kim

DETROIT (Reuters) - American Axle & Manufacturing Holdings Inc would cut hourly pay for unionized factory workers to $10 to $26 and offer payments of up to $105,000 for those who stay on at the lower wages, according to a summary of the proposed contract by the United Auto Workers.

The contract summary was distributed on Sunday at a union-organized meeting of several thousand UAW-represented American Axle workers at a Detroit high school.

Some 3,650 UAW workers are expected to vote as early as this week on whether to ratify the cost-cutting, four-year contract that would end a nearly 3-month-old strike that effectively shut down North American truck and SUV production for General Motors Corp and triggered thousands of layoffs.

The contract summary distributed by the UAW showed that the union succeeded pushing back some of American Axle's more drastic cost-cutting proposals, but had accepted sharply lower wages for both new and existing workers at the core of the proposed deal.

American Axle would close forging plants in Detroit and New York, but keep open a factory in Three Rivers, Michigan, at sharply lower wages.

The UAW also succeeded in getting the company to reverse a plan to close its Cheektowaga, New York, plant, according to the union contract document.

At the lowest wage, "factory support" workers at the company's Three Rivers plant would make $10 per hour. Truck drivers at that plant would make $12 per hour. New hires under the contract would start at $11.50 for production workers and $22 for skilled workers, according to the UAW document.

UAW workers would get a one-time signing bonus of $5,000 if the contract is ratified, the union said.

American Axle, which relies on GM for almost 80 percent of its revenue, would also provide buyouts of up to $140,000 for existing workers who leave the payroll.

In a statement, UAW President Ron Gettelfinger said union leadership recognized that the strike had been "extremely challenging" for American Axle workers and urged them to ratify the proposed contract.

GM had offered $200 million to fund buyouts and early retirement packages at American Axle and had said the strike cost it lost production of 230,000 vehicles through April.

The UAW went on strike on February 26, at five American Axle plants in Michigan and New York, triggering parts shortages that shut down production at some 30 GM plants in North America.

American Axle was formed in 1994 when Chief Executive Dick Dauch led a group of investors that bought unprofitable facilities from the No. 1 U.S. automaker.

The Detroit-based supplier had sought steep cuts in wages and benefits for its UAW-represented workers, saying it had to remain competitive with other suppliers, including Dana Holding Corp, that have come through bankruptcy with sharply lower labor costs.

Wall Street analysts have expected American Axle to get most of its demands for a concessionary contract from the UAW, a view that has supported its stock price in the face of slumping U.S. auto sales. American Axle's shares are up 21 percent since the start of the year.

(Editing by Maureen Bavdek)