October 4, 2006 -- American Axle & Manufacturing Holdings Inc. is instituting contract buyouts for its United Autoworkers employees at five manufacturing plants in Michigan and New York, citing ongoing changes in the automotive industry that is its primary market. AA&M is a designer and manufacturer of forgings for driveline and drivetrain systems, and related components and modules, and chassis system.
American Axle stated it will institute more restructuring actions this year “to realign its production capacity and cost structure to current and projected operational and market requirements.” It said these steps likely will include salaried workforce reductions, “redeployment of machinery and equipment to support new programs,” and other undetailed moves to rationalize underutilized capacity.
As explained by the company's chairman and CEO Richard E. Dauch, "The unprecedented, yet necessary, structural transformation of the domestic automotive industry is continuing at a rapid pace. AAM's special attrition program is necessary at this time to realign our workforce with actual and projected production and market conditions. The structural cost reductions anticipated as a result of this special attrition program will enhance our ability to invest in the continuing expansion of AAM's product portfolio, served markets, customer base and global manufacturing footprint."
The incentives are being offered to all UAW employees at AAM's master-agreement plants in Detroit and Three Rivers, MI, and Buffalo, Tonawanda, and Cheektowaga, NY.
AAM explains it will offer various early retirement incentives, buy-outs, and educational opportunities to the employees volunteering for the programs, including:
- A $50,000 incentive to retirement eligible employees;
- A monthly incentive for workers eligible to grow into retirement within four years;
- A $70,000 buy-out incentive to workers with less than 10 years of seniority
- A $100,000 buy-out incentive to employees with greater than or equal to 10 years of seniority;
- A $30,000 buy-out incentive to certain associates at Cheektowaga and the axle operations at Three Rivers; or
- An educational opportunities buy-out incentive program providing benefits of two or four years for tuition and living expenses.
Workers who choose retirement will retain all vested pension and post-retirement benefits, the company explained, and those who accept a buy-out will retain vested pension benefits but will forfeit other post-retirement benefits.