Axle strike’s effect to hit next week
The supplier strike could linger as the company considers moving production.
DETROIT (AP) — The increasingly bitter monthlong strike at auto parts maker American Axle and Manufacturing Holdings Inc. is starting to hit General Motors Corp. where it hurts.
Two GM factories that make cars, including the Lordstown plant, will be affected by the strike, which already has fully or partially shut down 28 GM plants in the U.S. and Canada due to parts shortages.
GM confirmed Thursday that the strike will force it to idle the Detroit-Hamtramck assembly plant after Friday’s lone shift, and a local union president in Lordstown said Thursday that his complex will be shut down by April 4.
Previously the strike had affected only plants that assemble or supply parts for slow-selling pickup trucks and sport utility vehicles.
But GM spokesman Dan Flores said Thursday the Detroit-Hamtramck plant, which makes the Buick Lucerne and Cadillac DTS sedans, is nearing the end of its parts supply from American Axle.
“Employees have been notified that we anticipate we are going to run out of parts sometime late in the shift on Friday, Flores said.
Closing the Lordstown complex, which makes the Chevrolet Cobalt and Pontiac G5 small cars, could hurt GM the most since the cars are selling well due to high gasoline prices.
Through February, the Cobalt, which gets up to 33 mpg on the highway, saw sales rise more than 43 percent when compared with the first two months of last year, according to Autodata Corp. G5 sales are up nearly 19 percent.
DTS and Lucerne sales are down nearly 20 percent for the same period.
“Once we go down, it should start affecting the dealers very fast,” said Jim Graham, president of UAW Local 1112 in Lordstown.
Graham said GM is running out of a small brake part for the Cobalt and G5 that is made by American Axle. The shutdown likely will affect 3,750 workers at the Lordstown complex and nearby parts suppliers, he said.
“Hopefully they resolve their issues and we get back to work and build cars,” Graham said. “We’re good at that.”
GM workers will get unemployment benefits as well as supplemental pay from the company if the factories are shut down.
Flores wouldn’t comment on the status of the Lordstown plant.
Industry analysts and dealers say GM still has an ample supply of pickups and SUVs despite the strike. But the company had only a 53-day supply of Cobalts at the end of February, low by industry standards, according to Ward’s AutoInfoBank.
About 3,600 UAW workers at five American Axle plants in Michigan and New York walked off their jobs Feb. 26 in a wage and benefit dispute.
There were signs on Thursday that the strike could last far longer.
Richard Dauch, American Axle’s chairman and CEO, warned in a Detroit Free Press report that the company has the ability to move work now done in the U.S. to foreign factories. American Axle has plants in Mexico, Brazil, Europe and Asia.
American Axle spokeswoman Renee Rogers said the company’s total U.S. hourly labor cost of $73.48 is three times the rate at its domestic competitors and too high for it to win new business.