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Help Wanted: Scab Labor Needed?

These days, a help wanted ad draws more interest than normal, here in Detroit, especially when it’s from one of the auto industry’s troubled suppliers. But one ad, in particular, is drawing intense scrutiny, a classified item in the suburban Oakland Press that reads,

“Employment offered to applicants…to fill anticipated attrition replacement openings after negotiations or in place of employees involved in…strike.”

The strike in question is the more than month-long walked that has shuttered operations at American Axle & Manufacturing and which, in turn, has all but brought the supplier’s largest customer, General Motors, to its knees. With key components in short supply, GM has been forced to close one assembly line after another, and as of today, at least 30 of its plants have been idled, with more likely to follow within days. Production of the Cadillac DTS, shown above, is among the latest GM models to be put on hold.

American Axle founder Dick Dauch was long hailed as a hero by the United Auto Workers Union for saving the company’s struggling operations – which were previously owned by GM and were considered highly likely to close because of quality and cost issues.

Under Dauch, American Axle became increasingly competitive, but the situation changed, last Summer, the company has argued, in the wake of the UAW’s new contracts with Detroit’s Big Three. Among other things, the union has agreed to permit GM, Ford and Chrysler to create a two-tier wage system, replacing thousands of current blue-collar workers with new employees making half as much, or about $14 an hour. American Axle has been demanding similar concessions, triggering the UAW walkout.

A spokesperson for the supplier told the Detroit News that American Axle is not seeking scabs, but the wording of the new classified ad would suggest that it is holding that as a possibility, should the strike drag on. Certainly, American Axle is under increasing pressure from its customers, notably GM, to end the labor confrontation. But those automakers also hope to benefit from the reduced parts costs American Axle would get if the union caves in. And the threat of scab labor in the current economic environment clearly puts pressure on the UAW to find a peaceful solution.
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Comment (1)
  1. Dauch and AAM deserve credit for a successful turnaround of a sadly neglected former GM business unit. But... they also enjoyed the confluence of good fortune. No one dared dream that crude oil would sell for $12 in the late 90s; that so many people could be persuaded to drive SUVs and pickups for personal transportation; or that so many of them could be persuaded to buy 4/AWD (a second drive axle) that they didn't really need. Evergreen contracts with GM were the icing on the cake.

    Well, the bloom is off the rose. The energy supply / pricing squeeze began in 2002, although it took Katrina to push US consumers out of their comfort zones. In its first ten years, AAM was at least as lucky as it was smart, but no matter... That was then, this is now, and Dauch plans to balance the budget at the expense of his workforce and blame the UAW for it all... not just their fair share, which is considerable.

    Apparently, he believes that he and 4 other senior executives earned their collective $40 million compensation in 2007. Not only does the UAW disagree with him, AAM shareholders, who collectively shared only $37 million dollars in earnings for 2007 would be inclinded to agree.

    Personally, I think the fate of AAM's US plants is already sealed. the NY sites are not productive or needed... they are history. The plans to move most of what's left in Detroit to Mexico are well developed. Dauch's lowball offer, is designed to piss off high seniority workers. They'll demand two tiers and/or buydowns, they'll have enough clout to get them. Dauch will then have the outcome he needs to justify moving most AAM jobs will move to Mexico by the end of the next contract.
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