American Axle & Manufacturing Holdings has been talking with workers about further cutting its labour costs.

People familiar with the talks told Reuters the talks were with unionised staff.

The report said the supplier’s move for more concessions came less than a year after United Auto Workers-represented workers accepted a concessionary contract in May that slashed hourly costs by as much as 50%, and only after a three-month strike.

American Axle had said at the time its new four-year labour contract would save the company $300m annually but the downturn in the US market accelerated in the second half of 2008, forcing all major automakers and parts makers to step up cost cuts.

American Axle, which makes about 75% of its sales to General Motors, told hourly workers last week that its flagship Detroit axle plant needed to accept further reductions in wages and benefits, two sources briefed on the matter told Reuters.

American Axle spokeswoman Renee Rogers declined to comment on talks with the union representing the Detroit plant but said the company needed to address a difference in wages and benefits between its plants, adding manufacturing costs at the Detroit factory were 50% higher than those at its plant in Three Rivers, Michigan.

Last year’s new contract had already cut hourly pay at Detroit plant to between US$14.35 and $26 but workers at the Three Rivers plant accepted steeper reductions in wages to between between $10 and $18.50 per hour, in return for getting the company to reverse a plan to close the plant.

Any changes would have to be negotiated with the UAW, the report noted.