Wild Ass Rumor of the Day: GM Bailing Out American Axle

Edward Niedermeyer
by Edward Niedermeyer

As the American Axle (AA) strike stretches into its second week, Automotive News [sub] reports that GM may be considering bailing out yet another troubled supplier. Thus far, GM has claimed the Axle-caused work stoppages gave them an opportunity to trim bloated truck and SUV inventories. But as the strike begins to halt all of GM's high profit North American truck production, and hobbles hundreds of other suppliers, this shit is getting serious. Negotiations between the United Auto Workers (UAW) and American Axle management are deadlocked. American Axle wants to cut UAW wages in half across the board, from $28/hr to $14/hr. The only viable scenario at this point: the now-standard package of buyouts, buydowns and flowbacks. Once GM has finished buying out enough of its own workers, it could move the holdout American Axle workers to its own payroll, freeing AA management to hire new employees at the now-competitive rate of $14/hr. But isn't the point of GM's buyout program to trim its payroll fat? And hasn't GM already blown its bailout budget on Delphi? Chapter 11 if they do, Chapter 11 quicker if they don't.

Edward Niedermeyer
Edward Niedermeyer

More by Edward Niedermeyer

Join the conversation
4 of 22 comments
  • Jthorner Jthorner on Mar 06, 2008

    No workforce is going to accept a 50% pay cut. Period. Can someone explain to me why the price of everything we actualy need keeps going up while every day factories are closed down and jobs shipped to China where it supposedly cheap to make stuff? Maybe there is a reason CEO pay has skyrocketed over the past 16 years while workers have been given the sharp end of a boot kick.

  • CarShark CarShark on Mar 07, 2008

    @quasimondo Good for blue-collar work...in the past. This is now. Service jobs are big in the economy now. Sure some Euro brands are looking to expand manufacturing here for export back to the Eurozone, but for the most part it's either work for less money or don't work at all. It's no disrespect to manufacturing. It's reality. In fact, I'd turn the whole thing on you and say what you've written is an example of the near deification of manufacturing and the "middle class", especially among the anti-business, anti-NAFTA protectionist sect.

  • SAAB95JD SAAB95JD on Mar 07, 2008

    I agree that NOBODY wants their wages cut, but maybe just maybe the HIGHLY compensated executives could take a 50% pay cut and pass that on to their workers. Hmm, nobody is suggesting that...

  • Quasimondo Quasimondo on Mar 07, 2008

    CarShark, it's no deification. There's a reason why the industrialized nations are the powerful ones. Jobs in the service industry don't hold as much influence in the global economy as manufacturing does, and they don't get the respect they deserve either. I'll even go so far to say they get less respect because many service industry jobs are seen as 'menial' and undeserving of even the most basic of employee benefits.