After a generous offer of $218 million from General Motors (GM), United Auto Workers (UAW) are now urging the workers at American Axle & Manufacturing Holdings Inc. to give their vote of confidence to the deal that has been put forth by American Axle. This deal is aimed at ending the three-months old strike and resume operations at the plant. However, the deal has left these workers concerned and quite bitter towards the management, as the deal proposes a 40% cut in the workers’ wages.

About 3,650 UAW-represented workers that includes almost 1,900 in Detroit will be voting in or against the favor of the American Axle four-year old contract. This contract aims at slashing hourly wages to between $10 and $26 and will also be offering $105,000 in a span of three years, for those workers who agree to the deal and remain with the plant. American Axle will also be offering buyouts worth $140,000 for workers who leave the payroll.

According to the American Axle, the decision to cut hourly wages is a necessary one, as it needs to stay in competition with the other suppliers. For instance, Dana Holding Corp has showed the positive effects of incredibly lower labor costs as it was able to recover even from a bankruptcy with this strategy

Most of the workers at American Axle feel that this is a no-win situation, but still they are considering the options in front of them, as they do not have much to go on. Ron Gettelfinger (President, UAW) tried to pacify the disgruntled worker and mentioned that the negotiation team had no option but to accept the drastic cuts in the hourly wages.

According to the Agreement:

• Hourly wage rates to be cut to a range of $10 to $26.
• Wages at the flagship Detroit plant would range between $14.35 and $26 per hour.
•  American Axle will offer payments of up to $105,000 over three years in exchange for lower wages.
• American Axle will offer buyouts of up to $140,000 for employees who leave the payroll.
• The voluntary buyout program will be offered 14 days after contract ratification and would include 45 days for workers to consider their options.
• Workers who opt for the buyout will leave American Axle by Feb. 1, 2009.
• New production hires to start at wages of $11.50 per hour, skilled trades workers to start at $22.00 per hour.
• A signing bonus of $5,000 to be paid to each worker following ratification.
•  A forging plant in Detroit would close within six months, while another forging plant in Tonawanda, N.Y., would be shut down between six months and a year after ratification.
•  American Axle would invest $170 million to $200 million in remaining U.S. Facilities.
•  The new contract, if ratified, will run until Feb. 25, 2012.
•  Worker contributions to health insurance would increase 3 percent annually starting in 2010; retiree health-care benefits would be unchanged.
•  Supplemental unemployment benefits, a form of wages paid to workers who are laid off in addition to public unemployment benefits, would be capped at $18 million for the company as a whole with funding provided by GM.

The prospective takeover of Jaguar by Tata Motors seems to have a positive impact on the British automaker which has registered a significant monthly increase in European sales in almost two years, amounting to nearly 70 percent. According to the European Automobile Manufacturers’ Association (ACEA), the long-struggling British automaker has posted a total sales of 4,047 cars this April. It is noteworthy to mention that, in April 2007, Jaguar posted a total sales of only 2,386 cars.

With the increase in the sales, Jaguar has showed the first monthly sales increase since July 2006. Since January, 2008, its European sales have increased 0.4 percent to 12,629 units.

The spokesman of Jaguar and Land Rover, Don Hume believes that the rise in sales was attributed by the launch of the new XF medium-premium sedan, that paving the way to company’s secured future. In addition, Jaguar’s X-Type lower-premium sedan and
XJ upper-premium sedan models have also seen an increase.

According to Hume, “We have got an order book for the XF for 18,000 units, which is at least as good as we hoped. We are working flat out to meet the demand."

However, while the Jaguar sales rose, the Land Rover sales dropped down to 14.6 percent in April to 6,023 units as compared to 2007. Its European sales have fallen 12.9 percent to 30,573 units during the first four months this year. In this context, Hume said that Land Rover was doing well in markets outside Europe. He added, "April was a record month for Land Rover globally and our global sales continue to rise. Land Rover is continuing its growth pattern of the last three years."

The strike at American Axle has cost General Motors quite dearly with its production capabilities dropping to an all time low and GM has also lost 285,503 vehicles of the total 2008 GM production due to the nearly three month old strike at American Axle.

With this figure looming in the boardroom folders, the GM management has started their production and hopes to catch up with the loss percentage. However, the plan of action for this bold dream has not been disclosed yet. All of GM’s efforts are shouldered on whether the UAW will ratify a tentative contract, on which voting is scheduled later this week. General Motors has already resumed full production at its truck manufacturing plant in Arlington, Texas. GM has also resumed production on one shift at the Moraine, Ohio, assembly plant. The Moraine plant had been closed to the unavailability of supplies and the Arlington plant had been operational in one shift only, again due to massive shortage of supplies.

GM spokesman Chris Lee said, “Due to our flexibility we have been able to make parts available. We do have some plans in place, but right now all it would be is speculation.” He further added that the production can pick up the pace, provided the UAW ends its strike and American Axle can resume supplies.

In an effort to boost production, General Motors has also begun to bring many of its parts and engine parts plants back online. These plants are:

1. Bay City, Michigan. (engines, transmissions, components)

2. Flint, Michigan (engines, components)

3. Livonia, Mich. (engines, components)

4. Parma, Ohio (components)

5. Romulus, Michigan (engines)

6. Saginaw, Michigan (metal casting)

7. Silao, Mexico (engines)

8. St. Catharines, Ontario (engines, components)

9. Tonawanda, New York (engines)

10. Willow Run, Mich. (transmissions)

After the long existing strike of the UAW workers at the American Axle & Manufacturing Holdings Inc., they went on a tentative contract with the motor parts maker on Monday, that would cut their wages by more than one-third.

A huge number of UAW workers went on the strike on February 26, of which 3,600 workers walked off their job in the wage-and-benefit dispute as the American Axle CEO Richard E. Dauch had threatened to move work out of the United States, if the company failed to win the wage cuts it has said it needs to remain competitive.

The strike caused a parts shortage for its major customer General Motors that accounts for about 80 percent of its business. More than 30 plants of the GM were affected by the strike. It is noteworthy that Detroit based American axle makes axles, drive shafts, stabilizer bars mainly for GM’s pickup trucks and large sport vehicles.

During the UAW’s strike, workers at GM plants also made a walk off their jobs. In order to begin the production at the plants, GM agreed to kick in $200 million to help end the dispute between the company and the union. As a result, the Detroit supplier American Axle and the UAW agreed on a tentative four-year contract late on Friday. The tentative contract would cut hourly wage rates to a range of $10 to $26 and offers up to $105,000 over three years in exchange for lower wages.

UAW President Ron Gettelfinger said that the deal was the best, bargaining team could do in tough circumstances. He explained the contract to the workers in a meeting on Sunday. But, the meeting was followed by anger and shouting as most of the workers were not happy with the tentative deal.

Ron Gettelfinger told a local radio station, "We started at ground zero and we tried to build back. It’s not an agreement anybody is touting as, ‘This is great.’ Absolutely not. It is not a good agreement."

Apart from wage cuts, according to the agreement , the company will run a voluntary buyout program. It will pay up to $140,000 for employees who leave. An early retirement program has also been included in the proposed contract.

The contract also stated that, the American Axle closes its Detroit and Tonawanda, N.Y., forge operations within a year and as far the axle plant in Buffalo, N.Y. concerns, it would close immediately.

GM shares rose 0.9 percent to $20.87 Monday, while American Axle shares fell about 5 percent to $21.42 in the New York Stock Exchange.

On Wednesday, a strike called in by the UAW hourly workers at Alliance Interiors forced a General Motors (GM) plant in Lansing, Michigan to halt production. This plant manufactures the immensely popular GM Crossovers.

This strike has also affected the GM plant located at the Delta Township, Michigan. According to a GM spokesperson, workers at the Delta Township plant most likely planned to end the second half of the work shift early due to strike at Alliance Interiors. Alliance Interiors has been a regular supplier to GM since 2006. Its primary supplies to GM are carpets, acoustical insulation and various other products

The GM management has asked the workers to report to their workstations by their regular shift timings on Thursday. The mention of ‘reporting time’ might seem a bit overkill for a corporate post. However, workers at the GM plant were planning a strike on Thursday morning over local labor issues. The strike is scheduled to start at 10:00 am.

According to Dan Flores (GM spokesperson), discussions with the UAW (United Auto Workers) are under way, but refused to comment further.

The UAW has been on strike against American Axle for the last two months. It is one of the major suppliers to the GM plants and so is Manufacturing Holdings Inc. Workers have been on strike against Manufacturing Holdings Inc too. These strikes have already rendered more than 30 GM plants idle or semi-idle across the United States. According to some experts, UAW is putting in all its efforts to draw GM to the negotiation table where American Axle and Manufacturing Holdings Inc are already seated.

Things can get even uglier for GM. If the UAW go on strike against the Delta Township plant, then production of GM’s most popular Buick Enclave, GMC Acadia and Saturn Outlook could take a major hit. In an industry where a 60 day supply of any vehicle is ideally acceptable, GM has only a 40 day inventory for its Buick Enclave.

The UAW strike at American Axle and Manufacturing has literally crippled General Motors 32 plants across the United States. These plants are responsible for the production of GM’s hot-selling models Chevrolet Malibu and Buick Enclave among others. In an unprecedented move, General Motors has offered American Axle $200 million that would greatly help the company initiate buyouts and one-time payouts to the returning union workers who would then be compelled to accept lower hourly wages. This generous offer from GM just might be the answer that American Axle has been looking for to put a quick end to the strike.

Following this news, American Axle’s share rose a full 2% on the New York Stock Exchange and the company finally got some room to breathe. According to GM spokesman Dan Flores, “We believe that the offer will help bridge the gap between American Axle and the UAW and the two parties will be able to reach a mutually satisfactory settlement in the near future." Commenting on this sudden development, American Axle spokeswoman Renee Rogers said, “This is sort of a breaking news situation. It happened very quickly. It makes us hopeful that the parties can quickly reach an agreement to bring an end to the terribly costly and disruptive strike.”

General Motors has not taken this action in charity though. Majority of GM’s production depends upon the smooth running of American Axle. GM itself is going through a crisis with UAW, as the latter is on strike at GM’s plant in Fairfax, Kansas. Another plant near Lansing, Michigan has been facing the aftermaths of a strike since mid-April this year.

Since February 26^th 2008, about 3,650 workers have been on strike against American Axle plants. The strikes were initiated by UAW after refusing company’s demands to cut the wages from $28 an hour to a mere $14 an hour.

A senior analyst Shelly Lombard at the research firm Gimme Credit said, “General Motors is like the nursery rhyme about the old woman in the shoe who had too many children. Everywhere it looks, there’s another mouth to feed. All of the potential handouts in total could possibly use up $1 billion of G.M.’s $24 billion of cash. Of course it will cost G.M. a lot more if the Axle strike drags on, so it’s worth the money to end the Axle strike and get Delphi back on its feet. One of the things that made the market comfortable with G.M.,” Ms. Lombard wrote, “was the fact that it had plenty of money to survive this industry downturn and give itself enough time to execute a turnaround.”

General Motors has averted a possible United Auto Workers (UAW) strike for two days, thus giving breathing room to its Kansas City assembly plant. The local UAW 31 has decided to give some extra time for the negotiations before considering a walkout at the Kansas Plant. The UAW has set the deadline till Thursday, April 24^th 2008.

According to the local 31 UAW President Jeff Manning, the offers put forward by General Motors over the issues of seniority rights and job security aren’t appealing to the 2,600 workers of the GM’s Fairfax assembly plant. This plant manufactures the widely popular Malibu Sedans at an average of 3,100 cars a week. However, as of now GM has only 37 days worth of supply for these cars on dealership lots.

Speaking on this subject Jeff Manning said, “We gave GM a great way to be profitable with our national agreement in September, but they’re going for more in the local negotiations.”

The Detroit-Hamtramck plant which was idle since March 31^st, 2008 due to the UAW strike at American Axle & Manufacturing Holdings Inc is now recalling its workers from Monday, April 28^th 2008. The slow progress of plant-level contract negotiations has put UAW and GM in a face off. Local agreements that comprise of work-rule, seniority and other noneconomic issues have been negotiated with only 10 out of 77 GM locals. These local contracts are not detailed in the master national contract.

Elsewhere, six other GM Plants are under the threat of UAW strikes over bargaining issues. The Lansing Plant in Lansing, Michigan has been idle since last week due to the UAW strike. This has severely affected the production of Buick Enclave, GMC Acadia and Saturn Outlook crossovers. General Motor’s Transmission plant in Warren, Michigan and GM’s stamping plants at Grand Rapids, Michigan and Mansfield, Ohio are also under the threat of a strike by the UAW workers.

For their assembly plants in Chicago and Louisville, Kentucky, Ford Motor Co. has decided that it will offer more buyouts to its hourly workers. These plants are two of the many selected plants where Ford will be releasing their buyout offers. According to Mark Fields (Ford President of the Americas), "We’re going to look at some of the capacity reductions and some of the plant closures to do targeted buyouts."

In March 2008, Ford had announced that only one shift will be operated in the Louisville and Chicago plants. Ford Explorer, Mercury Mountaineer, Ford Taurus and Mercury Sable and the Taurus X Crossover are some of the popular brands that roll off the assembly lines of these two plants. There are reports of possible buyouts in other plants as well. However, Ford has neither confirmed nor denied this report. Ford had initiated a massive company-wide buyout in March 2008. According to company figures, 4,200 workers have already accepted the buyouts. Sources inside the company report that Ford has an estimated target of 8,000 workers.

Mr. Fields believe that, if the employees anticipate that there might be an extended layoff or the possibility of a transfer, then they would definitely opt for the buyout and Ford wouldn’t have to make any changes to the offers as well. Mark Fields said, “By linking it to specific actions around shift reductions or plant closures, that can change the mind-set to one degree or another by the employee.”

Keeping profits and cost-cutting in mind, Ford has also not denied the possibility of white-collar job cuts. Ford is looking to axe North American operating costs by as much as $5 billion by the end of 2008. It also is determined to post profits in North America and for the entire 2009.

Ford Motors Co. has posted a $100 million profit for the first quarter financial results of 2008. However, according to company officials the company is still expected to lose money even after such an impressive result, mainly due to the slumping U.S. auto market. But even this speculation doesn’t overshadow the fact that the company’s stocks showed a 12% rise in the first quarter and it has also posted revenues worth $43.5 billion.

Since the second quarter of 2007, Ford hadn’t had the chance to post a profit and that too of such high numbers. However, the most notable fact of this quarter’s results is that the profits have come at a time, when U.S. Buyers are avoiding auto purchases amid the current economic crisis. Since the slump in the economy, Ford’ s sales have gone down by almost 9%, especially in the trucks and sport utility vehicles (SUVs) categories. Inspite of this fall, Ford claims that it has managed to earn sufficient revenues due to the sales in Europe and South America.

According to company CEO Alan Mulally, “The underlying business is improving. We remain cautiously optimistic despite the external difficulties.” Still there is a deeper problem for the Ford management, which has been haunting them for quite some time now. For the year 2007, Ford has posted an annual loss of $2.7 billion. This massive dent in company revenues, forced Ford to mortgage its assets just to stay in business. Now the question is whether Ford would be able to finish restructuring, before the company runs out of cash? Alan Mulally is confident that Ford will be able to compensate for last year’s losses even with the incredibly slow economy. Still, Ford admits that North American market is something they are very concerned about, as this could be the factor that could put a dent in Ford’s plans.

Ford had predicted an annual sale of its light vehicles in the U.S at 15.7 million cars. However, with growing economic concerns it has reduced that estimate between 15 and 15.3 million vehicle sales for the entire year. Ford has also come down on its estimates on North American sales to 101,000 vehicles for the year 2008.

Ford’s Chief Financial Officer (CFO) assured that after completing the financial formalities, Ford would still be left with a substantial amount of cash. As on March 21^st 2008, Ford had $28.7 billion in cash on hand and $11.9 billion in credit lines. Its total liquidity was estimated at $40.6 billion. Ford is planning to use an estimated $12 billion to $14 billion throughout the year 2009 to cover its losses and finish the restructuring project.

According to a German newspaper, Chrysler LLC is in intense talks with Italian car manufacturer Fiat negotiating a possible cooperation between the auto giants for the production of Alfa Romeo models in Chrysler’s U.S. Factories. The talks are believed to be in the advanced stages. Fiat produces and sells automobiles, trucks, wheel loaders, excavators etc.

According to the German newspaper Handelsblatt, “Handelsblatt has learned Chrysler could produce the cars for Fiat subsidiary Alfa Romeo. Industry sources say the talks are moving forward."

According to Reuters, on April 7^th 2008, Fiat had announced  its intensions to sell the Alfa Romeo model in the United States.

Fiat has so far declined to comment on the ongoing negotiations with Chrysler LLC.

Behind these talks, Chrysler and Nissan Motors have also announced a production alliance that would provide America, its much needed small car. It would also enable the Japanese car manufacturer (Nissan) to stay in the competition with the American pick-up truck market.