Despite increased dialogue between the UAW and American Axle & Manufacturing, the two sides remain at an impasse. The pressure is mounting for a resolution as the strike prepares to enter its eighth week. Over the weekend, UAW leadership rejected the company’s request to involve federal mediators to help resolve the dispute. As inventories for axles and other American Axle-forged products diminish, more plants are being impacted. Additional pressure comes from strike threats at GM’s Lansing Delta Township plant and other UAW Locals hoping to spur GM into action to resolve the strike and complete negotiations of plant-level agreements with the union.
The latest casualties in this ongoing strike include the Chevrolet HHR built at Ramos Arizpe #2 in Mexico and the Impala and LaCrosse built at Oshawa #2 in Canada. GM stopped production of the HHR on Monday, 14 April 2008. Oshawa will be impacted next week, Monday, 21 April 2008. Production at Oshawa #2 will be limited to the loss of one of three final assembly shifts at the plant.
GM’s Ramos Arizpe #2 plant also builds the Saturn Vue, but it is unaffected by the strike. The HHR is impacted due to a common component, an unfinished spindle, that is also used in the Chevrolet Cobalt and Pontiac G5 produced at Lordstown. This move signals that GM is willing to sacrifice HHR volume in favor of maintaining operations for the Lordstown vehicles. Daily output at those plants is adjusted to reflect the current situation and not total daily output.
Potential strikes by UAW Locals have been averted at Arlington, Parma Stamping, which supplies the Lordstown plant, and Flint Truck, although Lansing Delta Township, Warren Transmission and the Grand Rapids Metal Center are still threatening local walkouts that could begin as early as Friday, 18 April 2008. The Lansing Delta Township plant produces GM’s popular LAMBDA-based crossovers, which are in short supply, and the Buick Enclave, GMC Acadia and Saturn Outlook. If a strike impacts Lansing Delta Township production, we expect GM to move quickly to restore output and recoup any lost output, unlike the GMT900-based programs. Several other GM plants are coming back online in limited capacity, namely Fort Wayne and Oshawa Truck, while GM is taking Arlington offline following their strike notification that has since been retracted.
The UAW strike contributes to the further weakening of an already fragile US economy and, subsequently, demand for light vehicles, involving not only American Axle and GM workers but also an escalating number of supplier employees. Amidst this volatility, a UAW rally is set for 18 April 2008, while American Axle will hold its 1Q 2008 earnings call on 25 April 2008. The North American production forecast for April shows that the strike will continue through the month, reflecting a lost volume impact of over 230,000 units, yet GM is also expected to recoup lost output for select vehicles.
Enlarge Image
For questions, please contact:
Joe Langley
Senior Analyst, North American Vehicle Forecasts
joelangley@csmauto.com or +1 248 465 2832
Mike Jackson
Director, North American Vehicle Forecasts
mikejackson@csmauto.com or +1 248 465 2833
CSM Worldwide provides trusted automotive market forecasting services and strategic advisory solutions to the world’s top automotive manufacturers, suppliers and financial organizations. CSM Worldwide covers the global automotive environment from Detroit, Grand Rapids, Frankfurt, London, Paris, Shanghai, Tokyo, São Paulo, Budapest, Delhi and Bangkok.
