American Axle Profits Double, So it Closes its Cheektowaga Plant

19 Aug

As American Axle closes its Cheektowaga plant, ending its dalliance with western New York, consider the UAW’s point: 

Negotiations broke down on July 31st when UAW Local 846 Members voted 98% in favor of rejecting what American Axle said was its “last best and final proposal,” UAW Representatives said.  During contract talks, American Axle demanded more money and benefits from its Workers, UAW Officials added.  Union Workers have already taken concessions, but were willing to negotiate a contract that helps keep jobs in the local community.  Meanwhile, in late July, American Axle released figures showing that its profits soared to $47.9 million from $25.3 million a year ago.

“This is an indication that Hard-Working People are sick of constantly helping companies through concessions and back to profitability and companies refusing to share in that,” said UAW Vice President Cindy Estrada, who directs the Union’s American Axle Department.  “Here’s a business that started out as an American Company providing good-paying jobs to six-thousand employees.  As a result of the hard work of these employees, it has grown to an international company with thirty-two factories worldwide.  All of this success was achieved off the backs of the original six-thousand Hard-Working Americans.”

The numbers show that, even in a crappy economy, even with the labor costs currently extant in Cheektowaga, the company was making money, improving its standing thanks in part to concessions labor made in its last round of contract negotiations.

Those workers took concessions, and worked hard day in and day out for that company, helping it almost double its profits.  In doing so, they asked for a living wage, and that the company reward them for their earlier concessions and increased productivity. No luck.

The trend now is for management to demand more work for less pay from labor, and then shipping jobs to China or Mexico when labor’s had enough. This has to stop.

30 Responses to “American Axle Profits Double, So it Closes its Cheektowaga Plant”

  1. Brian Adamczyk August 19, 2011 at 7:24 am #

    Chris Collins loves this.

  2. John Roach August 19, 2011 at 7:35 am #

    Free trade with Canada may work, but it doesn’t with places like Mexico. So, what do you expect?

  3. jimd August 19, 2011 at 7:55 am #

    The scary part to me is companies say they are moving to China, India etc because that’s where the customers are. Wages are driven down, jobs shipped away and people can’t buy anything, so the corporate response is adios. Wave that flag.

  4. KevinP August 19, 2011 at 8:57 am #

    After American Axle closed both the Axle Plant and Tonawanda Forge a few years ago the writing was on the wall for this facility.  As someone who spent a lot of time in all those plants as a vendor it was sad to see them go (especially from my financial standpoint), but at the same time their geography and cost structure made no sense to me, let alone the parent company.

    The fact that AA&M made millions of dollars as a whole is irrelevant to the discussion if the Cheektowaga plant lost money or underperformed.  However, I don’t know that that was the case. 

  5. Jesse August 19, 2011 at 9:00 am #

    LOL @ using the phrase “living wage”.

    Good job, union guys.  Whether you like it or not, now there will be zero American Axel jobs in Cheektowaga.  Well done.

    Free trade is the greatest international success story of the last millenia.

  6. rastamick August 19, 2011 at 10:52 am #

    Yeah jesse way to take the bait of the scott walkers and chris cristys of our age. It s not corporate greed but union guys who ruin everything. we need to go back to the company stores and pinkertons cracking heads of labor organizers, then you can go breathe toxins and get mangled at work and die a slow death while your family scavenges. the good old daze really have quite a draw on some of you haters. 

  7. MJC August 19, 2011 at 11:45 am #

    Have you noticed that labor’s greatest opponents nowadays (aside from the corporations) are working people who make less money?

    The working poor see people with the same general set of skills and education and it kills them that the union workers are making a healthy wage, rather than the pittance they accepted. So, instead of forming their own unions and perhaps taking a bigger slice of the pie, they cheer for the destruction of unions, so that these workers will be just as badly off as they are.

    And you wonder what is wrong with this country.

  8. Bbill August 19, 2011 at 11:53 am #

    It says something about the teabagger set that they see the loss or outsourcing of American jobs as some sort of personal victory, that the continued erosion of the American middle class is cause for an end-zone celebration dance.

    • Christopher Smith August 19, 2011 at 12:02 pm #

      The tea party is like to a bunch or servants gathering their torches and pitchforks to storm the castle gates of their masters and screaming “HOW CAN WE HELP YOU GET RICHER TODAY!?!”

  9. Ward August 19, 2011 at 12:06 pm #

    Shorter UAW:
    “Wait–when you said that was your final offer, you meant it was your final offer?”

  10. MJC August 19, 2011 at 12:12 pm #

    Yeah, the UAW is to blame. All over the country, the UAW has spent the last 25 years giving up concession after concession in what will be an ultimately fruitless effort to keep at least some of their rank and file working.

    I cannot get enough of the Tea Baggers who continually cry that “half the population doesn’t pay taxes” but who have no problem whittling away at the middle class tax base. You can’t have it both ways folks. Either you have a large tax base (comprised primarily of middle class wage earners), or you have a situation where a relatively smaller (and wealthier) population are being asked to pay more to keep the government afloat.

  11. Rob August 19, 2011 at 12:16 pm #

    What Bbill said.

  12. outsourcer August 19, 2011 at 12:19 pm #

    What goes around comes around. As part of my job, I spend a lot of time in China looking at potential suppliers of manufactured equipment. Commerce is controlled by the government over there. Many of the International Corporations operating over there have competition from Goverrnment-owned companies. Up to now, the Government owned companies were not competative because of a lack of technology and infrastructiure. In the last 10 years however, the Chinese Government has poured an unimaginable amount of money into their companies to bring them up to par. They also subsidize the use of the products they produce by rules for government-run projects. The intent is to make China self-sufficient and to displace these (Corporate) potential threats to Chinese sovereignity with their own Companies. Chinese workers, originally drawn to working for western corpoartions because of the highe pay, are now flocking back to the government-run companies, because the pay is increasing, working hours are less and the perks, such as free housing, are better. Soon the well for these “Corporate fat cats” will run dry.

  13. Hank August 19, 2011 at 12:44 pm #

    And here, I thought the major part of Union activity was to PRESERVE THE JOBS. With around a dozen GM plants (Saginaw, AM Axle, Trico, Tonawanda Foundry, Delphi/Harrison) being closed in WNY, How many jobs has this Union preserved? tens of thousands have obviously been lost.

    My company has no union. Our employees are paid better than most companies in the area for manufacturing jobs. Sales staff is paid better than any company that we have polled in our industry. So I need to pay a chunk of my salary to some organization who pledges to protect my job? NC is a Right to Work State. Which means that they can fire you anytime they want. Since the economy crashed, you’d think that sales of products for Antique, Muscle and Collector cars would have nosedived too. The company hasn’t laid off one employee, I’ve only seen one fired in 6 years, and we have hit our figures for bonuses in both quarters this year to date. One of you educated liberals needs to tell me why, for God’s sake I need a Union? Last I heard on the news, less than 28% of the nation’s workforce is unionized, an all time low since the beginning of the last century. With all the union money going into political donations (Both parties, but the D’s much more than the R’s), I’m very happy NOT to pay dues to a union who would contribute to a candidate that I personally think is a scumbag. AM Axle closes, and as Billy Joel said “AND THE UNION PEOPLE CRAWLED AWAY”. What are all those workers going to get from the UAW now? SCREWED. Better them than me.

  14. MJC August 19, 2011 at 2:08 pm #

    All true, but when the Chinese well runs dry, they will simply come home to some downtrodden rust belt city where they will be welcomed by every tax break and subsidy imaginable, and a long line of the descendants of union workers, all of whom will be willing to work for low wages and no benefits.

  15. MJC August 19, 2011 at 2:32 pm #

    Hank – this is why no one takes you seriously:

    “NC is a Right to Work State. Which means that they can fire you anytime they want. ”

    That is not what it means. A Right to Work state means that a union cannot require a closed union shop at a business. In other words, if a company’s workforce becomes unionized, that union cannot require every worker to join the union, unless the worker wishes to.

    You’re thinking of the legal status of being an employee at will, which means that your company can fire you for any reason it wants, aside from illegal reasons, such as based upon race or sex. Newsflash – New York is an employment at will state.

  16. Pat August 19, 2011 at 2:59 pm #

    Keep buying that made in China product or that Hyundai made in Korea car. The American consumer is to blame. Buy American support your neighbors job and maybe they will support yours.

  17. MJC August 19, 2011 at 3:24 pm #

    I am not down with that either, Pat. I want the best car for my money. There is no reason in the world that the US auto industry can’t produce cars at least as good as any other country. I will not spend thousand of dollars more on a vehicle that breaks down before I can repay the loan.

    Luckily, it seems like the US has been doing better in this regard in recent years.

  18. Russ August 19, 2011 at 5:08 pm #

    “Better them than me” – Hank, you’re literally everything that’s wrong with modern America.  

  19. King Kong August 19, 2011 at 9:07 pm #

    We ought to institute a one hundred percent tax rate for any outsourcing and a zero corporate tax rate for manufacturers here, watch exports skyrocket and the US manufacturing sector explode.

  20. DJ August 20, 2011 at 9:51 am #

    @MJC Post #7 is right on point. Bravo.

  21. Bbill August 20, 2011 at 11:07 am #

    “The small landowners are the most precious part of the state.”

    Thomas Jefferson said that, and it’s pretty obvious he’s referring to what would have been the middle class of the day.

    If one of our death-to-the-middle-class teabaggers here want to pit Jefferson against any of their heroes (Dick Armey, Glenn Beck, Limbaugh, Rick Perry etc) well go for it, tiger.

  22. Tony August 21, 2011 at 11:42 am #

    “Russ wrote:

    “Better them than me” – Hank, you’re literally everything that’s wrong with modern America. ”

    Tell that to every unionize government monopoly ran. They don’t care about anyone except for themselves. If you can’t afford your tax increases then move…

  23. rastamick August 21, 2011 at 1:06 pm #

    And why do we continue to allow and encourage the chinese to unload tons of their shoddily manufactured shit on us but they have the straight arm up to us when we try to encroach their markets ? Seems a bit of legislation would set the imbalance right. Oh that’s right, thanks to Citizens United and our Supremely Corporate Court, the Chinese are free to buy up as much influence as their massive profits will allow. So get in line at Wal mart then stand there for 10 minutes and go to another line where the kid says, uhhh price check, this is gonna take a minute…and they know you are there to take advantage of the cheaply priced Chinese shit they peddle so fuck you and wait. Last time I set foot in that place that was my exact experience, shame on me for shopping there. 

  24. William August 22, 2011 at 9:55 am #

    What are the salaries of the individuals that will be affected?

  25. buffalo progressive August 22, 2011 at 10:56 am #

    The story keeps repeating itself:  The corporate execs turn record salaries, and record profits; and then demands the workers get paid a lower wage…

  26. Ward August 22, 2011 at 4:02 pm #

    A few years back I saw the W-2 of a UAW member from GM Powertrain, whose job it was simply to watch an automated assembly line make pistons. His earnings for one calendar year: $104,000.

    A “healthy wage” indeed, MJC. Wonder how much that had to do with GM’s bankruptcy/bailout, which of course was due to the company’s inability to compete with “foreign” (i.e., North Carolina) automakers.

  27. al l August 23, 2011 at 8:17 pm #

    Ward – 

    I highly doubt that 100k salary was straight time.  If a company understaffs its facility and then has to pay time and a half or double time, its their own fault.  Id further guess, that the bean counters had already run the expenses and found overtime was cheaper than additional employees.

    Secondly, Im sure that is a complete oversimplification of the position.  

    Thirdly, why not make 60K or 80 or 120?  Thats what built the middle class, not WalMart greeter jobs.  

    On a completely different note, if I was in that local, Id pack a months worth of food, march into that plant, bar the doors, sit down and not let a single machine/part/document/fax/order leave.  Screw ’em.  Just like the company screwed them.

  28. William August 24, 2011 at 8:58 am #

    So the middle class is an individual that makes 80-120k?

  29. al l August 24, 2011 at 7:03 pm #

    I figure thats a pretty conservative number, considering that the Republican Party was recently screaming for tax cuts for “middle class” earners – up to a million dollars a year.

    Secondly, yeah.  Id consider that middle class.  Id consider a a guy making 45K lower middle class, and 150k upper middle class.  So?

    Thirdly, any auto worker making 120k worked a lot of overtime.  He worked his butt off.  He earned it.  Did he use the system to his advantage?  Sure.  No more than any corporation come tax time.

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