American Axle contract ratified, strike ends

By Soyoung Kim

DETROIT (Reuters) - Workers at American Axle & Manufacturing Holdings Inc (AXL.N) on Thursday ratified a contract that cuts wages and costs, ending an 87-day-strike with a vote by the auto supplier's main Detroit plant to back the deal.

The vote by United Auto Workers Local 235, which represents about 1,900 of 3,650 American Axle's unionized workers, removed a major source of uncertainty for General Motors Corp, (GM.N) the supplier's largest customer.

Other UAW locals in Three Rivers, Michigan, and in New York had already voted overwhelmingly to ratify the four-year contract this week.

The vote at UAW Local 235 was seen as the biggest hurdle for the proposed contract because of opposition from workers at the Detroit plant frustrated that union negotiators had not turned back more of the company's demands for concessions.

UAW officials said the contract had been supported by 1,172 votes cast in favor of ratification at the Detroit plant out of a total of 1,314 votes deemed valid.

The UAW said the contract was ratified by a margin of 78 percent of the overall votes cast at five U.S. plants, including three facilities that will now be closed.

Some workers at the company's flagship Detroit gear and axle plant could return to work next week after the U.S. holiday, for Memorial Day on Monday, UAW officials said.

Despite the contract's tough terms, including a cut in wages by over a third, many American Axle workers said they were concerned that the weak U.S. economy and slumping truck sales would undermine any attempt to win more.

"I think a lot of people feared this is what they had to do," said Dana Edwards, UAW Local 235 shop chairman after the ratification result was announced.

Senior UAW officials had offered only a grudging endorsement of the contract while telling workers it represented the best deal that could be won.

"Our members have had to make some tough decisions for themselves and their families and have done so with careful deliberation," UAW President Ron Gettelfinger said in a statement.

American Axle said the union had told it that the contract had been ratified. Spokeswoman Renee Rogers said the company would have no further comment on Thursday night.

Separately, a union official said American Axle projects total costs of about $398 million to buy out retiring workers and provide "buydowns" in exchange for the lower wages for those who remain.

Detroit-based American Axle has not detailed financial projections based on the contract, the key issue for Wall Street analysts. Their forecasts have been based on information provided by the union.

American Axle told union negotiators during talks that it expected to cut its hourly work force by about 2,000 jobs through layoffs or buyouts. More than 900 of those cuts would come from its Detroit gear and axle plant.