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American Axle to cut N.A. capacity

1,473 workers take buyouts, early retirement

UPDATED: 1/11/2007 12:53 P.M. DETROIT -- One of the first axle-making plants acquired by American Axle & Manufacturing Holdings Inc. in the early 1990s could be idled as the company cuts excess capacity.

The company plans to close its Buffalo, N.Y., axle-making plant, according to two sources familiar with company plans. The company says the decision hasn't been made.

Early today American Axle announced plans to idle a portion of its U.S. production capacity dedicated to the mid-sized light-truck product range. The Buffalo plant makes axles for GM light trucks, says UAW Region 9 assistant Kevin Donovan, who declined further comment.

The giant axle maker also announced today that 1,473 UAW members agreed to the company's recent buyout and attrition plans. Of those, 1,208 members elected a buyout plan, the company said.

American Axle CEO Richard E. Dauch said in a statement today that the structural cost benefits of the attrition program and other restructuring actions should exceed $100 million annually.

American Axle originally offered various buyout incentives of up to $100,000 to about 6,000 employees at five plants.

Also today, the company said it will take a charge of as much as $200 million in the fourth quarter of 2006 as it plans to idle some of its U.S. production of light-vehicle parts.

The company did not say where it would cut excess capacity.

Spokeswoman Renee Rogers said the final decision on where the company will cut capacity has yet to be made. The company will redeploy some underused capacity to support new business without future capital spending, she said.

But the Buffalo plant's volume is about half of what it was when the company built axles for the previous-generation Camaro/Firebird.

Hopes that the Buffalo plant would land the axle contract for GM's next-generation Camaro were dashed in September. American Axle told employees that the work would be done at the company's plant in Guanajuato, Mexico, according to the publication Business First.

American Axle employs about 1,700 at its three facilities in western New York: Buffalo, Tonawanda and Cheektowaga.

The Buffalo plant was among the five final drive-and-forge plants that Dauch and James McLernon acquired from GM to create a spinoff in March 1994 known as American Axle.

American Axle ranks No. 44 on the Automotive News list of the top 100 global suppliers with worldwide original-equipment automotive parts sales of $3.39 billion in 2005.

You may e-mail Robert Sherefkin at rsherefkin@crain.com

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