


The strike last week by the International Brotherhood of Teamsters (IBT) against Performance Transportation Services (PTS) was the straw that broke the camel's back. The second largest car hauler in the United States was unable to survive the wage-related dispute, especially after filing for bankruptcy protection in 2006 and 2007. On Friday, PTS announced that it's stopping all operations and going out of business.
The effect on the industry overall will be minor. Automakers began rescheduled their deliveries last week when the strike was announced. As domestic vehicle production has slowed, excess transport capacity has been able to take up the slack and no major interruptions have been seen. It seems the striking workers have also been accommodated as the Teamsters are reporting that the "vast majority" of their 1,250 drivers have found work at other unionized locations. Still, any organized union thinking of striking in this economic climate should consider the possibility that such a move may result in pink slips for everyone.

Performance Transportation Services (PTS), the second largest car hauler in the United States, is being hit by a strike from the International Brotherhood of Teamsters. The walkout began this morning after a bankruptcy court granted PTS permission for a 15-percent emergency pay cut to the workers.
The Michigan-based transport company has been in trouble for years. Once hired to move upwards of 2.7 million vehicles per year, including 10,400 vehicles per day for General Motors, PTS filed for bankruptcy protection in 2006 and in 2007. Now, with the automotive industry in a slowdown and diesel fuel prices skyrocketing, it needs wage concessions to remain afloat. Without any proposal on the table, the Teamsters walked off their jobs at 24 different facilities this morning. Both Ford and General Motors, who count themselves as clients of PTS, have said publicly that the strike won't immediately affect their shipments of vehicles across the country. PTS also handles some shipments for Toyota and other automakers, all of whom are working on contingency plans in case the strike goes on indefinitely.
With closure to the American Axle & Manufacturing Holdings strike in sight, General Motors is pushing forward to resume production at the idled and slowed plants -- assuming UAW members approve a tentative contract later this week. As of Monday, the following plants were back in operation:
Each week the strike has dragged out, GM has lost significant production (29,925 vehicles were lost in the week ending April 26 alone). If GM cannot boost additional manufacturing output, by the end of this week the total number of lost units could be as high as 285,503. Even if the American Axle strike is settled, the UAW is still striking at GM's Fairfax assembly plant over the role of seniority in job placement. That labor dispute alone is costing the company 4,627 units each week.
The UAW strike at American Axle has ground on for three months, but an agreement with the union was reached on Friday. General Motors had pledged $200 million dollars to help get things rolling again after being forced to idle plants. The action has reportedly cost GM $800 million, so what's a few more on top of that to get plants back online? With that logic, the automaker's managed to shake loose another $18 million to pay for supplemental unemployment benefits, bringing its total commitment to $218 million in hopes of wrapping up the spat with its axle supplier.
When the UAW went on strike against American Axle & Manufacturing in late February, analysts expected a settlement within days. The supplier of axles, driveshafts, and other related components to General Motors and other automakers had a stockpile of inventory on hand, and few expected the strike to affect production. However, as talks failed to bring workers back, the situation quickly went downhill. By early March, nearly GM 20 GM truck plants were threatening to idle or shut down. By late March, GM's car plants were feeling the effects. Earlier this month, it was GM who offered up to $200 million to help bring the strike to an end -- the automaker has suffered production stops or cut backs at 30 plants in North America as of last week.
Today, American Axle made an offer to the union to bring the 11-week strike to an end. It includes buyouts to workers who have been on the job for more than 10 years, retirement packages to senior workers, and payouts to ease salary adjustments as American Axle makes pay cuts to keep their U.S. operations competitive. The latest agreement will be voted on by union members in New York and Michigan tomorrow. Let's hope they come to terms, as the strike has already cost GM an estimated $800 million.
General Motors has been hit so hard by the ongoing American Axle strikes that it's stopped production of the GMC Yukon, Denali, Sierra heavy-duty regular and extended cab, its commercial-duty pickup and variants of Chevrolet trucks and Tahoes. All the while, the General is still negotiating with the UAW over local contracts at some of its most important plants. To ease some of its supply problems, General Motors has reportedly offered as much as $200 million to American Axle for the funding of employee buyouts, early retirements and for the support of wage buy downs. The offer, however, is conditional on a quick resolution between American Axle and the UAW.
Spokesman Dan Flores says that GM hopes "the offer will help bridge the gap between American Axle and the UAW and that they will be able to reach a mutually satisfactory agreement in the near future." Both the UAW and American Axle sound supportive of the investment; Bill Alford Jr., vice president and incoming president at UAW Local 235 says, "We're happy that General Motors is finally coming to the table and realizing that they have a stake in American Axle's future." For GM's sake and that of the striking workers, we hope the feuding companies find an amicable solution soon, though it seems unfortunate that GM, which is not exactly posting record profits itself, should need to cough up funding to make it happen.
