February 29, 2008 / 11:55 PM / 12 years ago

UPDATE 1-American Axle says striking plants unprofitable

(Adds details, background)

DETROIT, Feb 29 (Reuters) - American Axle & Manufacturing Holdings Inc (AXL.N) said on Friday its five U.S. plants subject to a strike by the United Auto Workers union were not profitable and “have not been for years.”

In a statement, the Detroit-based auto parts supplier said its other U.S. and international plants were profitable because of lower cost structures in those locations.

The statement from American Axle came on the fourth day of a strike by the UAW against the company’s plants in Michigan and New York.

The work stoppage has affected about 3,600 union workers at American Axle and forced four General Motors Corp (GM.N) truck assembly plants to be idled because of a shortage of parts.

The UAW has charged American Axle with unfair labor practices and says the company withheld information the union required in order to assess its need for the sharply reduced wage levels it has demanded.

In its statement, American Axle denied that claim, saying it “has honored its duty to negotiate in good faith” and “has not engaged in unfair labor practices.”

The UAW’s charge with the National Labor Relations Board represents a legal move intended to keep American Axle from hiring replacement workers.

If American Axle took that step and was found to have violated fair labor practice, it could be forced to hire back striking workers or pay them back wages under U.S. law.

In its statement, American Axle said it was only seeking wage levels that would make it competitive with its U.S. rivals in the market for axles and related components led by Dana Corp which recently emerged from bankruptcy.

The supplier, which was spun off from GM in 1994 and still relies on GM for almost 80 percent of its revenue, said its hourly labor cost per worker under the just-expired UAW contract had been $73.48 per hour.

It said that was about three times higher than the company’s competitors are paying in the United States.

American Axle “cannot accept terms and conditions that put the company at a significant competitive disadvantage in the U.S. automotive supply industry,” company co-founder and Chief Executive Dick Dauch said in a statement.

No talks between the UAW and American Axle have been held since Monday and none are yet scheduled, a spokeswoman for the company said on Friday.

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