The AAM strikers have hit the 30 day mark. They are well on their way to meeting the duration record set last time. During the summer of 1998, workers at Flint, Michigan stayed out on the picket lines for 54 days. At that time, the entire GM North American operation was shut down. GM lost a couple of billion dollars. The GM-Flint strike ended as the summer heat peaked in late July, 1998.

This strike by the AAM workers is also being felt by the US economy. But this time, things are different. Because of the Internet, and services like the GMWorkersBlog, the whole world is watching. The AAM strikers are getting huge support from a wide range of labor and social justice groups. Looming in the background is the simmering discontent that is heating up across many different sectors of the economy. This fightback fever is rising, not only in the United States, but across the globe.

Here are two news items about the AAM fightback.

The first piece discusses a major backfire of the AAM executive strategy. When the AAM executives were preparing their annual statement, they had no idea as to the size and extent of the worker fightback. Clearly, the AAM brass had expected that by late March, 2008 any forthcoming AAM worker uprising would have been put down. They knew back then that the massive pay increases they had voted themselves in 2007 would have been disclosed this spring in the release of their regulatory filing with the U.S. Securities and Exchanges Commission. The AAM workers held out, well past the date of that AAM brass had anticipated. The AAM workers just learned of these million dollar pay outs to the AAM brass. The AAM strikers are really pissed off now.

The second piece profiles the strike in terms of its one month record.

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1. Executive pay could add tension to talks
Base salaries rise as cuts sought
FREE PRESS STAFF AND NEWS SERVICES
March 25, 2008

American Axle & Manufacturing Holdings Inc., the Detroit auto-parts supplier embroiled in a monthlong strike, paid CEO Dick Dauch more than $7 million last year, when the company returned to a profit.

With total compensation of almost $7.2 million -- excluding non-exercised stock options and pension contributions -- Dauch's pay package declined 9.2% from his 2006 package, which included a cash bonus of $3.9 million.

The Free Press does not include the estimated value of stock option grants or projected pension values, as they are not paid out in the period and rely on complex assumptions.

Dauch's 2007 package included $5.6 million in stock awards, up from $2.6 million such grants in 2006. But in 2006 he also received a cash bonus of $3.9 million; in 2007 there was no cash bonus paid.

Dauch's base salary increased 9.6% to $1.47 million in 2007.

Raises for Dauch and three other top officers may add to tensions stemming from the UAW walkout. American Axle has said it needs to reduce wages and benefit costs by more than half to compete against rivals with lower costs. Factory employees say cuts shouldn't be that severe when the supplier is profitable.

"How can you expect us to keep giving when they just keep getting more?" said Harry Jemkort, 42, who works at an American Axle forge plant in Detroit. "It's just throwing another log on the fire for us to say we'll stay out here, we're going to fight."

The UAW strike against American Axle continues to benefit from support of other union members. On Monday, laid-off members of UAW Local 412, which represents salaried union members at Chrysler LLC, came to Detroit to join the picket line.

In its annual proxy statement, American Axle said it gave the pay increases while continuing "to resize, restructure and recover from the rapid and unprecedented structural transformation of the highly competitive U.S. domestic automotive industry."

The company's share price fell almost 2% last year. American Axle shares were essentially flat Monday, gaining 3 cents, or 0.1%, on a day when most auto stocks rose substantially.

About 3,650 UAW members at American Axle plants in Michigan and New York went on strike Feb. 26 over wage, health-care and pension issues. The walkout has shut or slowed production at 29 General Motors Corp. factories in North America, and caused layoffs and slowdowns at suppliers that provide GM parts. GM is American Axle's former parent.

The supplier and union negotiators continued talks Monday, said American Axle spokeswoman Renee Rogers.

GM spun off American Axle in 1994, when Dauch left the former Chrysler Corp. to join as a co-founder.
Executive pay could add tension to talks

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2. No end in sight to strike against Axle
Eric Morath / The Detroit News
Wednesday, March 26, 2008

DETROIT -- The longest automotive strike in a decade turns 1 month old today, leaving American Axle losing millions, striking workers scrimping on $200 weekly strike pay -- and no end in sight.

But while both American Axle and the United Auto Workers are suffering, each side says they have much more to lose if they give in.

The company and its workers aren't the only ones losing, either: A new report estimates the strike has put as many as 40,000 out of work at related companies and is hampering the U.S. economy.

"Both sides are standing incredibly strong," said John Henke, auto analyst and president of Planning Perspectives Inc. "One side will have to come up with something unique to have a breakthrough."

The strike's issues are emblematic of the auto industry's current state: Executives at American Axle & Manufacturing Holdings Inc. say the company can't stay profitable if it continues to pay workers twice as much as some of its unionized rivals. Workers say they won't accept a 50 percent pay cut from a company that clearly was profitable last year. They say their house payments, children's college education and other bills will be out of reach if wages are cut from $28.15 to $14.50 an hour.

American Axle's largest customer is General Motors Corp., which has 29 plants at least partially shut down. GM is the so-far silent elephant in the negotiating room. High inventories and slow sales of the trucks and SUVs that use American Axle parts are keeping GM on the sideline and off the back of American Axle CEO Richard Dauch, Henke said.

"If GM was hurting, they'd push Dauch to the table," he said.

UAW wants job security
The lack of pressure from GM, combined with high stakes for both parties, has led to this now-historic stalemate. A 52-day walkout at two Flint GM plants in 1998 was the last time a UAW strike lasted more than a month.

Long strikes have become rare, said Mike Smith, director of the Walter Reuther Library at Wayne State University.

Since the late 1970s, the UAW's focus has shifted from gaining benefits and protections to securing jobs, he said. As part of that effort, union negotiators exchanged givebacks on wages for jobs.

The union has consented to wage givebacks, in bankruptcy court, for money-losing suppliers Delphi Corp. and Dana Corp. Last year, the union agreed to allow automakers to pay new hires less.

But the UAW knows that if American Axle wins concessions, other successful suppliers will want the same, Henke said.

"For American Axle, it's not about losing money this month or this year; it's a strategic play to get labor cost in line three to five years from now," he said. "For the workers, they don't want to accept less pay, but if they don't, will they have a job in five years?"

Experts say the UAW will resist wage cuts without offers of bonuses and buyouts to soften the blow to workers, pointing out that just such bonuses were cornerstones of the Delphi and Dana deals.

Strike's effect widens
Workers such as Eric Holland say they have little incentive to cut a deal and get back to work.

He said his daughter, a freshman at Saginaw Valley State University, urged him to go back, so he could help with tuition bills.

"I had to tell her if I accept a $10-an-hour wage cut, I won't be able to help out much more than I can on strike pay," said Holland, a Roseville resident.

While many workers said the strike would be short at the outset, now they have dug in.

"I think it could go at least another month," John Grunwald said. As winds whipped against his picket sign, he added: "We're not willing to go back for nothing."

The company and the union are holding occasional talks, American Axle spokeswoman Renee Rogers said. "We have reached understandings on some key issues. Bargaining is moving ahead, slowly."

After turning a $200 million loss in 2006 into a profit last year, the company risks slipping into the red if the strike is not resolved.

"Depending how long the strike goes on, they will lose revenues that are not likely to be made up, considering the current vehicle market," said Standard & Poor's analyst Robert Schulz. But so far, he said, the impact has been minimal.

Still, the strike's effect has widened beyond American Axle and General Motors.

Global Insight Inc. estimates that as many as 40,000 workers are laid off as a result of the strike, as dozens of suppliers to GM idle their lines. The lost revenue from vehicle sales will result in a 0.3 percent decline in annual U.S. economic output for the first quarter, deepening a projected fall, said Brian Bethun, Global Insight's chief U.S. financial economist.

"Given that economy is not growing much," he said, "it's a pretty significant impact."

No end in sight to strike against Axle

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Thank you,
John Martyn