1 April, 2010American Axle and Manufacturing Inc. violated the job security clause in its agreement with the UAW and must compensate the workers affected by its 2009 decision to outsource work to Mexico, an arbitrator has ruled.
USA: An arbitrator ruled on March 24 that American Axle & Manufacturing Inc. violated the terms of its 2008 National Agreement with the UAW when it moved its 8.25 axle production to its facility in Guanajuato, Mexico and must honour its commitments to affected workers.
"This is a major victory for these workers, and we're very gratified that the umpire upheld our strong outsourcing language reached in the 2008 agreements," said UAW President Ron Gettelfinger.
The 2008 labour contract was reached after a bitter 3-month strike among more than 3,600 UAW-represented workers at five American Axle plants. Workers protested wage cuts of about $10 an hour and benefit reductions but ultimately ratified a deal that made those cuts, fewer vacation days, shorter breaks and eliminated about 2,000 hourly jobs at the auto supplier.
Less than a year later, the supplier sought additional concessions from its workforce at in Detroit. When no concessions were reached, the company decided to move a large portion of its axle production from Detroit to its plant in Guanajuato, Mexico.
American Axle had claimed it retained broad discretion about what products to make and where and when to produce them. But the UAW pointed out that it negotiated specific sourcing commitments in the 2008 National Agreement. While the company retained the ability to adjust the size of its workforce in response to the economic downturn that hit the auto industry in late 2008 and 2009, it was not free to outsource the work it had guaranteed for Detroit Axle.
The parties have been ordered to determine the exact number of workers affected by the outsourcing, how many were laid off because of the improper outsourcing and how much those workers are due in wages and benefits.