From the Labor Commission of the CPUSA, updates, information, news, analysis, and organizing materials in solidarity with workers of the world.

Wednesday, May 21, 2008

American Axle workers face big pay cuts with new contract

by Melissa O'Rourke

After three months out on the picket line, the workers at American Axle finally have a contract to vote on. CEO Dick Dauch made known from the start that he wanted severe pay and benefit cuts in order to “remain competitive,” and that the workers would suffer for it. Even though he got a 9% raise this year and over the past decade has received over $257 million in compensation, and the company made a profit of $37 million last year, the workers are expected to ratify a contract that cuts their wages by over 33% and increases their health care costs. The deal also will shut down both the Detroit and Tonawanda Forges and offer buyouts and buydowns. Below is the average pay breakdown for production workers for both their current and new contracts:

Currently New Contract

$28/hr $18.50/hr

$1120/wk $740/wk

$58,240/yr $38,480/yr

This means a pay cut of $380 a week, $1647 a month, and $19,760 a year. The saddest part is that the UAW had to fight to keep the cuts at this level, rather than the over 50% cuts American Axle demanded. New production hires will be paid $11.50 per hour, twice a year they’ll get an extra $.50 an hour raise, until after 10 years they might make what their co-workers make. For some people $18.50 may seem like great money, but when that pay rate is $1650 a month less than what you’ve been living on, based your mortgage, car payments, kids college tuition and all your other living expenses, it’s devastating. At a time when foreclosure rates, personal debt, and the cost of living are skyrocketing, the last thing workers need is a drastic cut in pay. Does anyone really wonder why Michigan has the highest foreclosure and crime rates, along with the fastest growing population of residents receiving food stamps?

According to Wall Street, the labor costs are still too high. Financial firm Lehman Brothers projects that 1,200 of the 3,650 striking employees will opt for buyouts or early retirements. Those employees will "not be replaced in the U.S. but in Mexico," wrote analyst Brian Johnson in a note to investors. Earlier this week Dauch announced plans to expand in India and Thailand; perhaps they should change the company name to “Asian Axle” as they abandon their workers in the U.S.

"It's not a good agreement, but at this juncture it's the best we could do," said UAW President Ron Gettelfinger. After weeks at the negotiating table, he said he didn't think that more negotiations would net a better contract, so the contract goes to membership and will now be up to individual workers to decide their fates. After 11 weeks on the strike line during which American Axle shifted work to Mexico, many seem glad to still have a job.


Anonymous said...

The problem here is that the UAW has sucked the market dry by raising the labor cost so high and now they are getting pay back. I support AAM on this one. The reason Michigan is down in the dumps right now in the Manufacturing market is because people are over paid and lazy (UAW). NEW COMPANIES DON'T WANT TO WORK WITH THE UAW IN MICHIGAN BECAUSE OF THAT REASON. By the way do the big shots in the union stop taking pay when the workers go on strike? You should really think about that one.

Melissa O'Rourke said...

It's frustrating at best when fellow members of the working class side with management during labor disputes. This completely ignores the biggest reason many of these corporations are in the financial shape they are, because management fucked up. It wasn't that the workers busting their asses (as production numbers prove) made a crappy product, it was because management designed a crappy product, or a product that no one wanted in the first place.

But who's still getting raises and bonuses? If management gets fired (or "asked to resign") they get tens of millions of dollars in buy-outs and pension funds, and then they get job offers to fuck up some other company. The workers on the line are the only ones who pay.

Is it fair to say that these workers are overpaid when they get a fair wage from a company that's making a profit? Especially one who's CEO has made more than $250 million over the past 10 years? Get rid of the management fat. The workers are the ones who make the money for the company, it is their sweat and hard work that goes into making the parts, they should be fairly paid for that hard work. And if not for the union, the corporations would be paying the slave wages they paid before the union was founded.