American Axle may close, makes parts for H-3

[RubHer Yellow Ducky]

REUTERS

8:47 a.m. April 13, 2007

DETROIT – American Axle & Manufacturing Holding Inc. plans to close a plant in Buffalo, New York, that makes parts for trucks, United Auto Workers union President Ron Gettelfinger told union members late Thursday.
“However, we are in negotiations in an attempt to have new work brought into the plant,” Gettelfinger said in an online message. “We recognize this is a difficult challenge, but we are not giving up on this effort.”

American Axle, which earlier this year said it would idle a portion of production capacity at plants that make products for mid-sized sport utility vehicles, has about 700 employees at the Buffalo plant. The facility makes parts for mid-size pickup trucks and General Motors Corp's Hummer H-3.
Analysts responded positively on Friday, saying a closure of the plant would boost the auto parts supplier's earnings and could be a prelude to wage concessions.
“The ongoing cost savings associated with closing Buffalo are significant, due to the very high wages paid to AXL's U.S. workers,” Lehman Brothers analyst Brian Johnson said in a note, estimating the wages at $50 to $60 per hour.
Johnson had said in an earlier note the potential savings for moving work from Buffalo to Mexico would boost the company's earnings by $1.22 per share, based on 1,000 employees.
American Axle, which lost $4.42 a share in 2006, offered buyouts and retirement offers to its blue-collar work force last year. Nearly 1,500 workers, or one-fourth of the company's unionized employees, accepted the offers.
“Following its successful buyout program, it appears that here are now 700 employees left at Buffalo, implying potential savings of around 85 cents per share from the Buffalo plant,” Johnson said.
JPMorgan analyst Himanshu Patel said it is unlikely the union would be able to bring any new business into the plant. ”We doubt that would happen without a meaningful reduction in existing UAW wages/benefits,” he wrote in a note.
The union's current contract expires in March 2008, and Gettelfinger said the UAW does not plan to provide any concessions to the supplier before contract negotiations.
Lehman's Johnson said closing the plant would show the company's resolve to get to a more competitive labor cost structure ahead of its contract talks.
“Closing the Buffalo plant would send a strong signal to the UAW that it needs to make concessions at AXL's Detroit plants, if it wants future business to be sourced in the U.S.,” he said.
American Axle spokeswoman Renee Rogers declined to say if the company plans to close the plant. “We are saying nothing beyond the plans we stated last January.”
“We are idling some capacity at our U.S. plants for the mid-size light truck segment and Buffalo is one of those plants.” Rogers said the plant mainly serves GM, which is likely to cut production of trucks and SUVs as demand for those vehicles because of a weaker economy and a consumer shift to more fuel-efficient vehicles.

[Viet Nam Vette]

estimating the wages at $50 to $60 per hour.

GTFOH...?????? Holy PooP...!!!!

[deserth3]

[Desert Dan]

do they make the cast iron front diff?

[SR1355]

Doesn't surprise me, my dad worked in that plant as a subcontractor installing machines last several years on and off. He was appalled at the lack of productivity and the amount of money the typically worker was paid. He said may where making 140-150k a year with OT. CRAZY......

[Gooey Gaybob]

Originally Posted by Viet Nam Vette

GTFOH...?????? Holy PooP...!!!!

Hey vette boy, nice avatar, wanna go make out?

[HummBebe]

LMFAO!!!

[Huck BB62]

Here's the dealeo, and my problem with the anti-union bullsheot. They'll move the manufacturing down to Mexico. Do you think the cost of the H3 will drop? Hell no, it'll stay the same. Every since this bullsheot NAFTA thing started up, Americans have been taking the shaft. If we have fat cat Americans on big salaries making axles, so frickin' what. They're spending that money HERE. They're buying something that YOU make or sell. When that money goes to Mexico, then what? (basically Mexican welfare for an inferior product, that's what)

I say screw it, keep the AXL plant open. The price of our vehicles won't drop anyway so keep the money going to our middle class. When they move a factory to Mexico, the product's price doesn't drop, the shareholders and CEOs simply get more skim.

[bparker]

I agree and disagree.
I disagee with the inflated pay rates. Sure we do not see the immediate cost reduction as it takes years to trickle down to the consumer. That rate of pay is ridiculous!! To stay in business you have to use common sense and compete in the market place. 50-60 per hr is NOT getting your dollars worth. Lets keep it realistic here.

I too would like to see them relocate to somewhere in the south where labor is much cheaper. They could cut thier pay rates in half and keep it american.

Now as for Mexico, if they must move, I would rather see them go to Mexico than China. Complain about NAFTA all you want as I hate it too - however - it gives us an alternative choice to China which is as we all know the worst possible choice of all.

Originally Posted by Huck BB62

Here's the dealeo, and my problem with the anti-union bullsheot. They'll move the manufacturing down to Mexico. Do you think the cost of the H3 will drop? Hell no, it'll stay the same. Every since this bullsheot NAFTA thing started up, Americans have been taking the shaft. If we have fat cat Americans on big salaries making axles, so frickin' what. They're spending that money HERE. They're buying something that YOU make or sell. When that money goes to Mexico, then what? (basically Mexican welfare for an inferior product, that's what)

I say screw it, keep the AXL plant open. The price of our vehicles won't drop anyway so keep the money going to our middle class. When they move a factory to Mexico, the product's price doesn't drop, the shareholders and CEOs simply get more skim.

[usetosellhummer]

Unions got too fat and because of the greed and bloat have forced jobs overseas. Thsi has killed our country. A new union reflective of the 21st century is needed.

[Huck BB62]

I'm betting that the axle plant employees would LOVE to be making 50-60$ an hour. I'm calling BS.

In so cal, a frickin' union nuclear plant operator barely makes $40 an hour (of this I know).

Here's what's killin' on the American manufacturing:

Osha rules. They cost a mint. Granted, they save workers, but that ain't free. Move the plant to Mexico or anywhere else, all that cost becomes nil.

Environmental compliance. Same thing. Move the plant, save a mint.

Everyone loves bashing the unions. Who signed the contract? Who made the money, plenty enough money to sign those contracts?

[usetosellhummer]

it's 2007 contracts mean nothing,

[usetosellhummer]

I belonged to a Union, it'a a joke at this time, back in the day they helped, now they just get fat, and will not be able to protect health or retirement benifits in the future.

[hummer_metal]

The 50-60 dollar an hour wage is for what the company must charge as per employee on the clock. Not the hourly wage of the employee themselves.

I have different levels that I charge clients depending which machine is being used.

My 100 ton brake press is 60.00 an hour, tig and or mig is 85.00 an hour because there are added cost in materials and labor. My brake press operator makes 15.00 an hour, where as my welders make 18.50 an hour.

You might think that 50-60 dollars is a lot, however you need to figure adding in other cost. IE; Each employee I hire cost me 5-6 dollars more an hour than what I am paying them, insurance, comp. unemployment benefits and so on.

Now consider the cost to run the machines and the cost of the machines themselves. A good brake press can cost 30k-150k, but in order to keep a business up and running you have to make sure the equipment can pay for itself.

Then there is profit, so you have to factor many things together in order to come up with a hourly charge. 50-60 dollars an hour is not bad at all....

Being a Entrepeneur myself, I understand what it cost to keep a company in the green. In the four years I have run my company I have never made a loss and have never been in the red.

Not to be rude, but I also say how the profits will be spent, and over wages, 100% of it goes back into my company to build my customer base and add new products.

[hummer_metal]

Originally Posted by usetosellhummer

I belonged to a Union, it'a a joke at this time, back in the day they helped, now they just get fat, and will not be able to protect health or retirement benifits in the future.

This is correct....

[Huck BB62]

Originally Posted by hummer_metal

This is correct....

Maybe some, but that blanket statement's completely inappropriate. The unions I deal with, the IBEW, Pipefitters, and some others are the only game in town for large scale, highly trained labor. They're the only people providing apprenticeships. There's no "non-labor" companies capable of doing the highly skilled, massive, technical jobs on power plant construction and maintenance. I've seen 'em come and go. The non-union companies SAY they can compete and that they can do the job for cheaper, then they come in and provide crap for service and skills. Valuable time is lost on rework, failed inspections due to poorly done work etc. The non-union crews that come in look like, and perform like they picked them up at the work release program that morning. They steal, don't show up, and in general, are a joke.

I can't even fathom a job like a bridge being built, power plant being constructed, or a high rise being raised by non-apprentice program raised scabs with marginal and unproven skills. Maybe small dinky stuff, but as a rule, the larger more complex jobs require large, skilled, proven workforces.

[hummer_metal]

Unions....

Fair enough, I called NCST today, they have 15 months of school behind them. Yet have no hands on, I know your point...

But I am expected to pay 14-15.00 an hour for their students?

http://www.ncstinfo.com/index.jsp?&C...e_trade_school

I have fired 9 people in the last 6 weeks because they have lied on their resume. If you say you can do it, and I provide you with the machines to do it, you better be able to produce.

That being said, since the industrial revolution, unions have had there place. Today? No!, OSHA has stepped in..

I pay scale, and have never had a labor issue other than not being able to do what they said they could do.

You can say anything you want in my shop, but when it comes to putting up, you better be able to do what you say. If not, your screwed.

See my point?

[f5fstop]

UAW plant workers DO NOT Make $50-60 bucks an hour!!!!!!!!!!!
Best is around 25-30. This figure, includes their benefits (insurance, retirement, etc.) and that sounds a bit high to me. Also a big rumor that many made over $150K a year with overtime. Let's try around $90-100.
I agree with some, the company out of ignorance signed the contracts that the union is working under. My opinion of the UAW will be dependent upon their new contracts to be signed this year. Will the UAW use some common sense, or get stubborn and say screw it, and the auto industry falls?

There are a lot of intelligent UAW workers who understand they have to bend, to drop some of their benefits, or lose it all. However, there are some who would rather hit the streets than bend one inch. Again, let's wait and see what happens this Sept.

[startin\' young]

first of all i am a union worker and i only make about 15 an hour, my benifits are all paid for. so not everybody is making 25 an hour. all you have to do is spend one day in a union shop to see that they are necessary to have. (btw i build the duamax motor) the reason why unions are getting weak is because the people now and days will not unite and stick together, u have union brothers ratting on other union brothers. this is the same problem with the usa right now we are split down the middle.

yea i will admit that 50 and hour is high but u have to look at a few things like how long have they been employed, how much training they have, and the company ageed on the wages they are making.

i think that the number one problem in our country is outsoursing of jobs, i don't know about the rest of u but i do not want to work at any fast food joints because if people keep taking jobs overseas that will be the only jobs out there (oh i forgot the number on outsourser wal m**t will be there)

thank you huck for reminding that even though they move to mexico the price of the truck will not drop, it just makes the big wigs pockets get fatter.

"united we stand divided we fall"

[f5fstop]

A few questions (and statements):
1. Where were the UAW and other union workers in the 60s and 70s, when the electronics industry in the USA was hurting due to imports? From my experience, they were lined up purchasing Sony, Hitachi, Panasonic, etc. Do not get me wrong, I am not condemning this action, I was there purchasing the imported products too. However, now that their jobs are at risk, they are screaming. Do not get me wrong, the last thing I want to see is the decline of the auto industry. Not only because I work in it, but also I believe that if GM and Ford go out of business, this country is in big trouble.

The auto companies put a lot more into this country than the transplants. Most of the transplant vehicles contain less USA/Canadian content, and the primary profits go back to Japan or Korea, not into the USA economy.

For those who believe the country would survive without GM and Ford, I agree with you, the country will survive. However, not counting the number of GM/Ford/Chrysler employees who will no longer be working, let us count all the suppliers, truckers, rail, dealers, technicians, etc. Look at the taxes these companies, suppliers, dealers, etc., pay into the economy. The USA will survive, but it will be a large dent in our country.

The country is not only in trouble because of the income lose, but for national defense. If we ever need the industrial capacity to build for another world war, what do we do, outsource to Mexico? If it was not for the big three in WWII, we might all be talking German or Japanese today. Just look at the tanks, planes, and even machine guns that the car companies were able to start manufacturing in months after the war started.

2. Why do union workers always condemn Wal-Mart, yet every union worker I knew in TN, shopped at Wal-Mart? It used to kill me that the UAW news out of Spring Hill had a message at least once a month about stores that were not union friendly, and a good union worker should not shop there. However, when I was there purchasing cleaning, auto, household items, I always spotted union workers and their families. Talk about hypocrisy.