American Axle says UAW contract talks stall

DETROIT (Reuters) - Auto parts supplier American Axle & Manufacturing Holdings Inc (AXL.N) said on Tuesday contract talks with the United Auto Workers union aimed at settling a three-month-old strike had stalled since Sunday.

The Detroit-based supplier, which relies on General Motors Corp GM.N for about 80 percent of its sales, said negotiations were snagged on two issues: health-care benefits and supplemental unemployment benefits.

It issued a statement in an update on contract talks. A UAW spokesman had no immediate comment.

About 3,650 UAW-represented workers have been on strike at five American Axle plants in Michigan and New York since late February.

The work stoppage has shut down much of GM's North American production of trucks and large SUVs since the automaker relies on American Axle to supply components for those vehicles.

Last week, GM offered $200 million to help American Axle fund buyouts and other one-time payments to remaining workers in exchange for their speedy ratification of a contract that would give the supplier the sharply lower hourly wages it says it needs to compete.

American Axle said the two sides made progress on "numerous issues" in talks over the past weekend.

"There are very few remaining issues separating the parties from reaching agreement," the company said. "Unfortunately, negotiations have stalled since late Sunday over two issues: health-care benefits for actively employed (workers) and supplemental unemployment benefits."

American Axle said the UAW asked the company to continue to provide comprehensive health-care insurance coverage.

The UAW also wants supplemental unemployment benefits that represent wages and benefits paid out to workers in the event of future layoffs, American Axle said.

In both cases, American Axle said the union was asking for contract terms that were closer to the standard for the major automakers rather than their smaller suppliers.

"Paying associates who are not working is an uncompetitive burden that (American Axle) cannot bear if it is to compete successfully in the U.S. market and earn new or replacement business," the company said.

American Axle said the UAW asked for a signing bonus of $5,000 for each worker under a new contract and asked for one-time buyouts of up to $140,000 for those who agree to leave.

American Axle said the union needed to recognize that the "rapidly accelerating deterioration" in the U.S. market for trucks and SUVs was undermining the major market for its axles and related components.

"While this is unfortunate, it is a market reality that (the company) and the international UAW must jointly address," the company said.

The company added that it stood ready to continue talks to "reach an agreement that ends this terribly costly and disruptive strike."

GM has said it lost production of 230,000 units through April because of the strike.

The No. 1 U.S. automaker also took steps this week to ramp up production of full-size pickup trucks and other vehicles like the Chevrolet Impala and Buick Lacrosse. Production of those vehicles had been idled due to the strike.

GM has not said where it secured parts for its truck and car assembly plants in Oshawa, Ontario or assembly plants in Mexico and Missouri, where it also added back shifts as of Monday.

(Reporting by Kevin Krolicki; editing by Gunna Dickson/Jeffrey Benkoe)