TOWN OF TONAWANDA: Deal could close plant

Staff Reports
Associated Press

May 02, 2008 12:38 am

— A deal is in the works to settle the United Auto Workers strike on American Axle, but the news may not be good for the Town of Tonawanda forge, according to the Detroit Free Press.
The newspaper cited anonymous sources in its Thursday editions who said both sides were nearing an agreement that would close the facility and its counterpart in Detroit.
The settlement could include lump sums of money offered to workers in exchange for accepting lower wages at plants that remain open, but it is unclear what would be offered to Tonawanda’s workers in the event of a closure, the paper said.
The strike has been going since Feb. 26, when more than 3,600 American Axle workers walked off the job protesting a proposal to cut wages in half. The company has contended that the cuts are necessary to keep jobs in the U.S. while remaining competitive.
American Axle spokeswoman Renee Rogers refused to elaborate on the facility’s fate and said that a deal has still not been reached.
“I’m certainly not going to comment on speculation or what anyone else has said, because negotiations are ongoing,” Rogers said.
Even though the company is staying tight-lipped, news of the potential deal sent shares of American Axle stock up as much as 15 percent, according to reports from Reuters.
Striking workers were more vocal, confirming they have been told the union and the auto parts supplier are close to a deal that could end the two-month strike, according to the Associated Press.
Detroit Worker Ken Krzycki told the AP a local union official told picketers some details of the possible settlement on Wednesday.
American Axle workers were told that skilled trades employees such as electricians would see their wages cut to $25.50 an hour from roughly $32.
The company would pay workers $90,000 “buydowns” over three years to ease the transition to lower wages, and it would offer $140,000 over two years for workers to sever all ties with the company, said Krzycki, 59, who has 11 years with the company.
Without seeing all the details, Krzycki said he thinks the framework of the deal could be approved by workers, who have been on strike since Feb. 26. The buydowns would be appealing to many, he said.
“A lot of guys are hurting out there,” he said. “Nobody anticipated the 8-week-long strike.”
About 3,600 UAW members in Michigan and New York went on strike in a dispute over the company’s demands for lower wages and benefits.
But worker Steve Gerard of Troy said the wage cut may be a tough sell because workers bought houses based on the current wages. With the cuts, they may not be able to make the payments.
“I don’t think you’ll be able to maintain your home,” he said.
Town of Tonawanda Supervisor Anthony Caruana the plant closing would place a heavy burden on taxpayers and make it more difficult to draw new business to the area.
UAW Region 9 Director Kevin Donovan could not be reached for comment because he is in Detroit working on the deal.
Local 235 President Adrian King confirmed the numbers and said the union is evaluating the proposal, according to the AP.
The Associated Press contributed to this report.

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