American Axle CEO says could move work out of U.S.


DETROIT, March 27 (Reuters) - American Axle & Manufacturing Holdings will shift its manufacturing out of the United States if the auto parts supplier cannot reach a deal with striking workers to slash wages, the company's CEO said in a newspaper interview.

"We have the flexibility to source all of our business to other locations around the world, and we have the right to do so," Chief Executive Dick Dauch, a company co-founder, told the Detroit Free Press.

"We will not be forced into bankruptcy in order to reach a market-competitive cost structure in the United States. If we cannot compete for new contracts in the U.S., there will be no work in the original plants," he said in the interview, published on Thursday.

The threat to close American Axle's five U.S. plants, located in Michigan and New York, comes a month after some 3,650 hourly workers represented by the United Auto Workers union walked out on strike.

American Axle is a major supplier to General Motors Corp and was spun off from the automaker in 1994. The strike has caused parts shortages that have idled or partly idled 29 GM plants, including eight assembly plants. Other auto parts suppliers also have had to cut back because of the loss of GM production.

American Axle has said wages and benefits run more than $70 per hour, about three times higher than at its competitors, and it will have to close plants unless it gets wage cuts to as low as $14 per hour.

It has also sought to close New York plants in the towns of Tonawanda and Cheektowaga and idle part of its sprawling production complex in Detroit, union officials have said.

The union has rejected American Axle's call for steep wage cuts and filed an unfair labor practices complaint against the company.

Representatives of American Axle and the UAW could not be immediately reached for comment.

Dauch told the newspaper that Detroit-based American Axle was ready to negotiate buyouts and early retirement incentives in exchange for workers accepting lower wages and reduced benefits. (Reporting by Kevin Krolicki; editing by John Wallace)



Follow Us

Sponsored Introduction Continue on to (or wait seconds) ×