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UAW votes to accept wage cuts, end strike

May 23, 2008|From Bloomberg News

Workers for American Axle & Manufacturing Holdings Inc. approved a contract Thursday that cuts wages and shuts two plants, ending a 12-week strike that idled production at its largest customer, General Motors Corp.

A majority of the 3,650 United Auto Workers members at five plants in Michigan and New York voted to approve a four-year agreement that will reduce wages and provide buyouts to workers who agree to quit, said Adrian King, president of union Local 235, which represents workers in Detroit.

"It passed," King said of the vote at the largest and last union to ratify the agreement. "Good or bad, now we can start getting our lives back together."

The approval paves the way for GM to open 20 plants that have shut or partially closed because of parts shortages.

American Axle will reduce wages and pare its U.S. manufacturing presence while avoiding the bankruptcy filings that were the fate of other suppliers, including Delphi Corp. and Dana Holding Corp.

Under the agreement, hourly pay will drop by more than one-third for some jobs, to a range of $10 to $26 across all five plants involved in the strike, according to a proposal distributed at a UAW meeting in Detroit on Sunday.

The base pay for production workers would be about $18 an hour, down from as high as $28.14. Worker contributions for health insurance would rise 3% annually starting in 2010.

American Axle will close a forge plant in Detroit and a factory in Tonawanda, N.Y., union leaders said at Sunday's meeting.

The company will also provide buyouts worth $140,000 to workers with more than 10 years of experience. Cash payments over three years adding up to no more than $105,000 are designed to soften the blow from lower wages.

About 1,172 members voted yes and 429 voted no at Local 235 on Thursday, King said. Four other locals, including two more in Michigan and two in New York, voted in favor of the agreement earlier this week.

"I think with the economy the way it is, with the truck sales the way it is, I feel that's what people thought they had to do," said Local 235 shop chairman Dana Edwards.

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