Detroit’s Big Three automakers face the prospect of running short of key components for some of their most profitable models as the United Auto Workers Union strikes supplier American Axle. More from Headlight.News.
The UAW strike could cripple production of high-volume, high-profit products like this Chevrolet Silverado.
Nearly one thousand union workers at the Dauch Corp. American Axle plants in Three Rivers, Michigan went out on strike early Monday morning, launching a confrontation that could quickly cause havoc for Detroit’s Big Three automakers, as well as Nissan.
The strike by members of United Auto Workers threatens to disrupt the supply of steering systems, axles and other components used in some of the best-selling and highest-profit products produced by the automakers, including General Motors’ Chevrolet Silverado and GMC Sierra pickups.
UAW President Shawn Fain said during a Facebook livestream just prior to the-midnight strike deadline the union was fighting to correct historic imbalances created by a company making record profit and paying top executive substantial bonuses.
Setting the stage for a confrontation
Workers walked off the job just after midnight on June 1. (Photo courtesy: WMMT.)
The strike at American Axle also is a signal the union is prepared to push for higher wages and better benefits with the critical automotive parts sector.
“The fact is we make the system work,” said Fain, who credited Local 2093’s members for making American Axle profitable. But over the years, workers at Three River plant have seen their wages cut virtually in half by a series of concessions.
Dauch Corp. executives have not commented on the negotiations since they began in late March.
“No assurance”
After making concessions during the Great Recession, American Axle workers now earn half what they did before, after factoring in inflation.
The Dauch Corp., which changed its official corporate name from American Axle earlier this year, has not made any public comment on the talks with the union. But the company’s annual report published in April acknowledged it could face a strike that would disrupt its operations and deliveries to customers.
“There can be no assurance,” that future negotiations with labor unions, including those related to the 2026 expiration of the collective bargaining agreement with the labor union representing certain of our associates at our largest U.S. facility, will be resolved favorably,” the annual report noted.
Jay Korf, a UAW Local 2093 member at American Axle, who voted to give the union the power to strike, said, “We’re not asking to break the bank; we’re demanding our fair share after all our sacrifices and years spent building this company back up.”
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Workers want to regain what they’ve given up
The American Axle Three Rivers Plant.
In 2008, workers at American Axle took major sacrifices to save the facility from closure during the Great Recession. Many long-time workers who were making as much as $29 an hour in 2008 saw their wages slashed to $14.50.
Eighteen years later, workers are yet to make up all that lost ground, with wages at American Axle currently topping out at $22 an hour after a five-year progression, with inflation-adjusted wages cut in half from their pre-2008 levels, according to the UAW.
Four other American Axle plant originally covered by the 2008 agreement closed for good by 2013 as the company shifted more work to Mexico.
UAW targets supplier sector
UAW President Shawn Fain wants to start winning big packages from auto suppliers.
Meanwhile, the UAW continues to push to rebuild a reputation for delivering contracts which boost the wages and benefits of working-class Americans in the automotive supply sector.
Fain is also pushing for tougher restrictions in the next version of U.S.-Mexico-Canada Agreement, the Trump administration now beginning the process of renegotiating the deal approved during the president’s first term in office.
The UAW hopes that any updates to USMCA would make it more difficult for suppliers such as American Axle to move work out of factories in the U.S.
Who’s next?
American Axle appears to be just the first of numerous auto parts manufacturers facing tough demands from the UAW. Believed next in line is Nexteer, another key supplier to GM, Ford and Stellantis. The Nexteer steering gear plant in Saginaw, Michigan is represented by members of UAW Local 699.
Jill Dralle, Vice President & USA Division President, Nexteer Automotive, said in a statement, “Nexteer management and the UAW bargaining committee continue to discuss UAW member feedback to address open items and reach an agreement that builds a strong, sustainable future for our Saginaw employees and Nexteer. All terms of the current agreement will remain in effect during this period,” Dralle said.
The strike comes at a time when sales of vehicles are sputtering in the face of higher gas prices spawned by the Iran War and higher interest rates. But industry analysts also note the impact that rising vehicle prices have had on demand and caution that any new wage hikes could add to that upward pressure.
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