Saturday, 16 July 2011

American Axle plant closing underscores shift in factory jobs



The closure of American Axle and Manufacturing Holdings Inc.'s Detroit manufacturing complex in February 2012 will complete another chapter of supplier plant job losses across the industrial Midwest and United States.
The company's Detroit manufacturing site, which once housed eight factories and as recently as 2007 employed about 2,200 workers, is now down to a mere 300 workers.
The rapid downsizing of American Axle's Detroit operations followed the collapse of U.S. auto sales and the 2009 bankruptcy of its largest customer, General Motors Co.
But uncompetitive labor costs, automation and increasing demands to be located closer to customer plants are also playing a role as the auto parts industry continues to shift production from states like Michigan to non-U.S. sites.


In addition, the rapid rise in new car and light truck sales and production in China, Brazil, India and other markets is resulting in factory job losses here.
As of May, there were 579,900 motor vehicle and parts manufacturing jobs in the United States, according to data from the Center for Automotive Research in Ann Arbor, Mich. That's nearly a 50 percent drop from 1999 when 1.1 million people were employed in automotive manufacturing.
Most of the job losses have taken place in Michigan and surrounding Great Lakes states and Canadian provinces, where North American light vehicle output is still concentrated.
American Axle's Detroit plant fell victim to the slump in big pickup truck sales and rising gas prices. It supplies axles used in GM's large trucks, and without wage and benefits cuts from workers, American Axle said the plant could no longer be competitive at lower volumes.
When GM and Chrysler filed for bankruptcy protection during the latest industry downturn, Detroit-based American Axle was forced to slash daily output from 14,000 axles to 8,000, and eventually down to 6,000 axles a day.
The company struggled to stay out of bankruptcy through the downturn. It received $110 million in cash from GM and a $100 million line of credit in exchange for allowing the automaker to buy up to roughly 20 percent of the supplier's common stock. Payrolls dropped from 13,000 employees to 7,000, and plants in New York were idled or closed. The Detroit complex also underwent a major consolidation.
After it was unable to reach a favorable contract with the UAW at its Detroit plant, American Axle announced it was closing the plant. The company had invested $333 million in the site when it was acquired in 1995.
The Detroit-based supplier will be down to approximately 1,800 employees in Michigan following the closure, said Christopher Son, director of investor relations and corporate communications. American Axle employs 8,500 worldwide.
Visteon Corp., which was divested by Ford Motor Co. in 2000, had 45 U.S. manufacturing plants in 2005. Following its October 2010 emergence from Chapter 11, it's down to only one plant in the U.S.
Delphi Automotive LLP, which was spun off by GM in 1999, has whittled the number of U.S. manufacturing plants down to two from 26 in 2006,

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