DETROIT -- Now that Axle Alliance Co. has a national labor agreement with the UAW, the company's CEO says he will encourage his suppliers to accept the union, too.
Last week, Detroit-based Axle Alliance and the UAW announced the union's first national multiplant pact with an auto parts maker in 20 years. The agreement covers current and future hourly workers and runs through 2009.
Axle Alliance is wholly owned by DaimlerChrysler AG. It makes axles for Freightliner LLC, DaimlerChrysler's maker of heavy trucks.
The agreement would cover employees at its plants in Redford, Mich., and Kings Mountain, N.C., if a majority select UAW representation. The company has 205 hourly employees.
In February, the UAW signed a local contract with 80 workers at the plant in Redford, which is a Detroit suburb. That contract also will cover a new division in Detroit that will produce gear sets in 2005.
UAW President Ron Gettelfinger calls the contract a breakthrough agreement. He says it is a model the UAW will shop to other makers of auto parts.
Axle Alliance CEO Christof Traidl says accepting the union was the least expensive way to minimize labor strife as the company expands.
The UAW's success at Axle Alliance contrasts with its failed 1999 effort to organize DaimlerChrysler's Mercedes-Benz plant in Vance, Ala. The union tried unsuccessfully to use national contract talks at the Chrysler group to force Mercedes to accept the union.
The UAW has long negotiated national contracts with the Big 3. Using the same strategy with suppliers would reduce the cost and effort of negotiating wage and benefit pacts at hundreds of individual plants.
Traidl says he will encourage suppliers to accept the union.
ArvinMeritor Inc. of Troy, Mich., is the largest supplier to Axle Alliance.
Traidl says he approached the UAW after winning support for his business plan in 2002 from DaimlerChrysler. That plan included acceptance of the union.
"They were a little surprised," Traidl says of his overture. "They were happy to get the jobs."
Axle Alliance's production workers are paid about $14 per hour to start. They are eligible for additional compensation for extra training and meeting performance goals. That can lift hourly wages by an additional $7 per hour, Traidl says.
That compares with the average of $26 per hour for union workers at Chrysler's New Castle, Ind., parts plant. A deal this year to sell the plant to Metaldyne Inc. included a wage cut to $16 per hour .
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