American Axle eyes more labor cost cuts:sources

DETROIT (Reuters) - American Axle & Manufacturing Holdings Inc AXL.N has had discussions with its unionized workers in a bid to further cut hourly labor costs, people familiar with the talks said on Monday.

The supplier’s push for more concessions comes less than a year after its workers represented by the United Auto Workers accepted a concessionary contract in May that slashed hourly costs by as much as 50 percent, ending a three-month strike.

American Axle had said its new four-year labor contract would save the company $300 million annually.

But the downturn in the U.S. market accelerated in the second half of 2008 in the face of credit market turmoil and slumping consumer confidence, forcing all major automakers and parts makers to step up cost cuts.

American Axle, which derives three quarters of its sales from General Motors Corp GM.N, told hourly workers last week that its flagship Detroit axle plant needed to accept further reductions in wages and benefits, two sources briefed on the matter told Reuters.

American Axle spokeswoman Renee Rogers declined to comment on whether it has started discussions with the union representing the Detroit plant.

But Rogers said the company needed to address a difference in wages and benefits between its plants, adding manufacturing costs at the Detroit plant are 50 percent higher than those at its plant in Three Rivers, Michigan.

Last year’s new contract has already cut hourly pay for the Detroit plant to between $14.35 and $26.

But workers at the Three Rivers plant accepted steeper reductions in wages to between $10 and $18.50 per hour, in return for getting the company to reverse a plan to close the plant.

Any changes would have to be negotiated with the UAW.

Reporting by Soyoung Kim; Editing by Andre Grenon