Almost 1,500 United Auto Workers union members at American Axle & Manufacturing have taken up a buyout or early retirement offer.
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The company on Thursday said 1,473 workers “agreed to participate in AAM’s special attrition programme” which was offered to all UAW-represented workers at several plants in Michigan and New York state.
AAM offered a range of early retirement incentives, buy-outs and “educational opportunities”. Workers who retired as part of the programme retain all pension and post-retirement benefits while those who chose a buy-out will retain pension benefits but forfeit other benefits.
AAM said 265 associates opted for early retirement while another 1,208 chose buyouts. Over 1,300 left the company before the end of 2006.
“The special attrition programme accelerates our ability to realign our hourly workforce with actual and projected production and market conditions,” said AAM chairman & CEO Richard Dauch.
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By GlobalData“The structural cost benefit to AAM resulting from the special attrition programme and other related restructuring actions should exceed $US100m annually.”
Last October, AAM estimated that it would incur special charges of as much as $150-$250m in 2006 for the attrition programme and other restructuring.
It expects to book a cost of about $140m, including $10m for pension and post-retirement benefit curtailment and special termination benefits. This also includes costs associated with salaried workforce reductions and supplemental unemployment benefits estimated to be payable to UAW represented workers who are expected to be permanently idled to the end of the current collective bargaining agreement in February 2008.
AAM now expects to incur special charges in a range of $175-$200m for these items in 2006.
AAM also said today it would idle a portion of its US production capacity dedicated to the mid-size light truck product range.
This move will incur asset impairment charges of up to $200m in the fourth quarter of 2006.
