G.M. to shut 7th plant after American Axle strike

From the NY Times 3-05-08

Published: March 5, 2008

DETROIT (Reuters) — The General Motors Corporation said Tuesday that it would close a seventh plant next week because of a strike against a supplier, American Axle and Manufacturing.

A G.M. spokesman said in a recorded call that the company’s transmission plant in Toledo, Ohio, was expected to close Monday because of the strike by the United Automobile Workers.

The latest announcement will affect 1,300 hourly employees, G.M. said. All the closings mean that about 15,000 workers, or almost 19 percent of the blue-collar work force in G.M.’s North American manufacturing facilities, could be laid off because of the strike.

About 3,600 U.A.W.-represented workers in Michigan and New York went on strike last Tuesday against American Axle, and a spokeswoman for the supplier said talks between the sides have not resumed.

“We’re ready to talk when they’re ready to come back to the table,” the spokeswoman, Renee Rogers, said. U.A.W. officials were not available to comment.

American Axle relies on G.M. for almost 80 percent of its sales, and the layoffs show that the impact of the strike-related shutdown is starting to spread across G.M.’s product line.

American Axle, which was spun off from G.M. in 1994, said it needed the U.A.W. to accept steep concessions on wages and benefits to keep production in the United States.

The chief executive of G.M., Rick Wagoner, said on Tuesday at the Geneva auto show that he hoped American Axle and the union could resolve their dispute.

He said that G.M. had been able to continue some production on the vehicles that have parts supplied by American Axle and that inventories still remained a little high on the vehicles.

Analysts have said a short work stoppage could allow G.M. to run down inventories of trucks and sport utility vehicles, but have cautioned that a longer disruption could be costly.

Sales at G.M. tumbled 16 percent in February after adjusting for the number of sales days, according to data released on Monday. Sales were down 20 percent for G.M.’s trucks, the area of its lineup where exposure to American Axle is highest.

Mr. Wagoner said that American auto sales were weak in the first two months of the year, but had not approached the extremes of some forecasts.

“It is fair to say that it has been a little better than some of the doomsday people are thinking,” he said.

Settlement in Canada

The TRW Automotive Holdings Corporation, the auto-safety equipment maker, said Tuesday that it reached an agreement to end a strike in Ontario that forced Chrysler to idle a minivan plant.

About 170 workers at a TRW plant near Windsor, Ontario, who walked out Feb. 28 will return to work, the company’s spokesman, Manley Ford, said.

The strike caused Chrysler to shut its Windsor minivan factory on Feb. 29.

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