DETROIT - American Axle & Manufacturing Inc. is trying to take a General Motors plant that was a rusting relic of Detroit's past and transform it into a model for the future.
The plant is GM's Detroit axle plant that the automaker jettisoned as part of a move begun two years ago to sell 18 operations in its Automotive Components Group.
American Axle bought the 89-acre industrial and corporate complex on the border of Detroit and Hamtramck last February.
Since last March, the company has spent $25*million on improvements and hired 1,200 new employees, boosting the work force to 4,500. The company also landed contracts with automakers to sup- plement long-term deals with GM for gears, axles, brakes and forged parts.
While General Motors generated sales of $1.3 billion in 1993, American Axle is on target to exceed annual sales of $2.2 billion.
The driving force behind the resurgence is its chief executive, former Chrysler Corp. manufacturing chief Richard Dauch, his handpicked senior executives, and a remarkably cooperative relationship between management and labor.
What they hope to do is profit in the epicenter of the industrial Midwest, setting a standard for the global auto supplier industry. Its success - or failure - could provide a road map for what it takes to create jobs, renew neighborhoods and prosper in Detroit.
'I wanted to be CEO of an American-owned, Detroit-based automobile company,' said Dauch, who is partners in American Axle with Detroit investor Morton Harris and Cleveland industrialist Ray Park.
'The vision was to create an entirely new automotive tier, one global supply company .*.*. to compete with the big boys throughout the world' such as Rockwell International Corp., TRW Inc. and Eaton Corp.
'We want to be in Detroit and we want to profitably grow in Detroit. Our intentions were to buy it, fix it, improve it and make it world class.' That was something GM couldn't do.
Division spokesman Gerry Holmes said, 'The plant, if it was to be profitable, was going to require a large infusion of cash, and GM didn't have it. We couldn't spend it on axles instead of new products.'
But GM desperately needs axles and gears. So it sold the operations, agreed to buy parts from American Axle and left the capital improvement to the new owners.
Longtime workers say GM neglected the Detroit complex during the past 10 years. There was too little preventive maintenance and too little spending on improvements.
No so with American Axle. It is spending $1.5 million on roof repairs and $5 million for two machines that transform iron bars into axle shafts. Another $5 million is being spent to renovate the forge's tool-and-die room.
That is refreshing for Charlie Gonchoroff, chairman of Die Sinkers 110 of the International Association of Machinists.
'I see somebody spending money, making improvements we should have made 20 years ago, interested in people - so far,' he said. GM 'never put nothing into this place and half the machines didn't run.'
American Axle's connecting rods, stabilizer bars and axle shafts and gears must be lighter, stronger and better engineered.
To make profits that eluded GM, the new company must improve its quality, streamline management and draw new customers.
The management team is designed to enable American Axle to quickly push through new products, new processes and new hires.
'The process at GM was fraught with bureaucratic hurdles,' said former GM executive Phil Lugger, now American Axle's director of labor relations. 'Now, I don't even have anybody to call.'
Rick Rossman, Dauch's vice president for manufacturing, dismisses suggestions that business can no longer flourish in Detroit.
'All of us have worked in and around Detroit for years,' he said. 'Detroit doesn't frighten us. I'd rather solve the problem than run from the problem.'