Corp. will give Mfg. & Holdings up to $200 million to help settle a labor dispute at the parts supplier, according to a regulatory filing by the auto maker.
The money will help AAM fund the employee buyouts, early retirements and buydowns it will provide workers in return for lower wages and potential plant closures.
About 3,650 United Auto Workers union members walked off job at AAM plants in Michigan and New York 11 weeks ago after the two sides failed to reach a new contract. Talks restarted several weeks ago and just a few days ago the two sides were thought to be nearing a settlement.
But GM continues to slow or idle production at more than 30 manufacturing facility due to a parts shortage. AAM supplies axles and drivelines to most of GM’s trucks and some passenger cars.
GM also faces work stoppages at key assembly plants in Kansas and Michigan over unsettled local labor agreements. Some Wall Street analysts suggest the UAW walkouts over the local agreements are a scheme to draw GM into talks between AAM and the union.
“Should these work stoppages continue for an extended period and we are unable to procure the necessary parts from other sources, in the case of, we would be materially adversely impacted,” GM says in Securities & Exchange Commission filing earlier today.
GM also says in the filing that it believes it has the necessary liquidity to meet all 2008 funding requirements, including the potential near-term impact of a continued work-stoppage at AAM.