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GM Offers Financial Package to End American Axle Strike

Posted: 05/09/2008 - 1:33 PM ET

After announcing earlier in the week that it was being forced to halt production on a number of full-sized trucks and SUVs due to the ongoing United Auto Workers strike against American Axle and Manufacturing Holdings, General Motors will pay $200 million to bring the labor action to an end.

Since February 26, approximately 3,650 workers from five American Axle facilities have been off the job, a situation effecting the supply chain to GM and forcing the automaker to suspend orders for the GMC Yukon, GMC Denali, GMC Sierra heavy-duty regular cab, GMC Sierra heavy-duty extended cab, GMC commercial heavy-duty, Chevrolet Tahoes, and some Chevrolet full-sized trucks.

The agreed upon payment, described as a move to "help bridge the gap" between American Axle and the UAW, will be used to defray the costs of employ buy-outs and buy "downs." American Axle has demanded that striking workers take 50% pay and benefit cuts to allow the company to remain competitive with other axle manufacturers like Dana Holding Corp.

According to figures compiled by GM, the American Axle strike has cost the carmaker $800 million for the first quarter of 2008, an accounting period that ended on March 31. A spokeswoman for American Axle, Renee Rogers, said the assistance deal from GM "came together very quickly," but few other details of the arrangement were released.

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