American Axle Mich. plant seen approving contract

THREE RIVERS, Mich, May 19 (Reuters) - Union members at an American Axle & Manufacturing Holdings AXL.N plant in southwestern Michigan are likely to approve a contract that would end a three-month strike by granting the supplier deep concessions, the local bargaining chairman said on Monday.

Workers represented by the United Auto Workers in Three Rivers, Michigan could even break ranks with the company’s other remaining plants and return to work if locals in Detroit and elsewhere balk at the contract’s tough terms, UAW local official David Morris said.

About 3,650 UAW-represented workers went on strike Feb. 26 at American Axle facilities in Michigan and New York. The union and company reached a tentative agreement on Friday that requires a majority vote of union members to be ratified.

Roughly 800 of those UAW workers build driveshafts and axles in Three Rivers, one of the original plants the auto supplier acquired from General Motors Corp. GM.N in its founding 14 years ago.

“Because we were spun off from the national contract, if Three Rivers passes this vote, I expect Three Rivers to return to work,” Morris, UAW Local 2093 bargaining chairman, told Reuters in an interview.

In a break from established practice, the UAW negotiated lower wage rates at the Three Rivers plant than at the other American Axle plants as a concession to convince American Axle to keep the plant open.

Morris said he would ask American Axle to abide by buyouts, retirements and cash buydowns in the broad agreement if it is rejected by other locals, but accepted by Local 2093 members. If it agreed, then his local could return to work, he said.

An agreement to end the strike at even a single American Axle facility, would be welcome news to GM, which has at least partly idled production at about 30 plants in North America because of parts shortages.

GM accounts for about 80 percent of American Axle’s sales and relies on its axles for its pickup trucks and SUVs.

The tentative UAW agreement would close forges in Detroit and Tonawanda, New York, within a year and force the immediate closing of an already idled plant in Buffalo, New York.

Workers at the Detroit forge also were voting on Monday, but workers at the large Detroit axle plant are scheduled to vote on Thursday and Morris said he did not expect to release results until the Detroit voting was completed.

Morris said he was effectively shut out of the negotiations for three weeks before the tentative agreement. He said both UAW officials and the company had backed away from a pledge to compensate Three Rivers workers from $140,000 to $160,000 to accept wages that are lower than those proposed elsewhere.

Morris was told on Friday they would be offered the same $105,000 cash “buydown” as workers at other plants, he said.

The UAW received promise of some future business at Three Rivers in the fall and in 2010, but Morris still expects up to 200 retirements and 150 buyouts to pare employment at the plant to a range of about 550 to 600 hourly workers within a couple of years.

Morris called the results of the negotiation “bittersweet,” but noted American Axle had threatened to close the Three Rivers plant.

Absent buyouts, American Axle had said it would need to lay off more than half of its U.S.-union work force. Slow sales of GM trucks, gasoline reaching $4 per gallon and the prospects of a U.S. recession all presented obstacles in the talks.

After concessions requests in 1999, 2003 and now in 2008, some workers worried American Axle will want further concessions when the proposed agreement expires in 2012.

Many workers seemed resigned to the agreement.

“I don’t think we had much of a choice to tell you the truth,” Dale Blair said standing on a picket line covering an entrance to the Three Rivers facility.

“The union did its best, it is take it or they will leave,” said Blair, who joined GM in 1978 and has been with American Axle since its inception. (Reporting by David Bailey; editing by Carol Bishopric)