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If the agreement is ratified by the factory’s nearly 1,000 workers who are members of UAW Local 2093, it would bring an end to a strike that began on June 1 and threatened to disrupt production of General Motors’ Chevrolet Silverado and GMAC Sierra trucks.
About 44% of the production from the American Axle plant at Three Rivers, in the US state of Michigan, are supplied to General Motors’ assembly plant ay Flint, in the state of Michigan, according to Marick Masters, professor of business at Wayne State University in Detroit.
The “Detroit Big Three” automotive producers – GM, Ford and Stellantis – represent 75% of American Axle’s business, Masters said.
The tentative agreement “secures the workers’ top line demand of a salary of] $30 per hour by 2030 – a more than 36% increase to the top wage rate over four years – among other historic gains in a record contract,” UAW said on Wednesday.
“Tonight, after 10 days on strike, I am proud to announce that UAW Local 2093 has reached a tentative agreement at American Axle,” UAW president Shawn Fain said on Wednesday. “And tonight, after 18 years of sacrifice, these workers are finally winning back a big chunk of what was taken from them.”
Bill Renna, vice president, Americas, at GlobalData Automotive in Farmington, Michigan, said: “If agreement is reached [via union member ratification], it should return steel demand to levels prior to the strike rather quickly — given the [commercial] importance of the models affected.”
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GM produces more than 1,000 trucks per day, and the Silverado and Sierra together generate profits of $2.7 billion per year, according to Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions in Chester Springs, Pennsylvania.
Fiorani is not surprised that American Axle has agreed to salary demands from the union after first rejecting them.
“[The union workers] sacrificed to keep the company moving forward, and it’s time for them to be recognized for that,’“ Fiorani told Fastmarkets on April 11. “It’s a competitive market for skilled workers and, if Dauch wants to survive, agreeing to this new contract is in their best interests, as well as the interests of the union members.”
A shift in steel demand by US-based automakers buying parts from American Axle could affect a range of steel products, including cold-rolled coil, hot-dipped galvanized coil, stainless steel long products, special bar quality steel and cold heading quality steel, according to analysts.
Elizabeth Krear, president and chief executive officer at the Center for Automotive Research in Ann Arbor, Michigan, said last month that forecasters now expect a decline in annual production of 300,000 vehicles this year, falling to 15.7 million from 16 million in 2026.
Automotive sector production is tempered by rising prices for automobiles and trucks, Krear said, along with a shift away from electric vehicles to hybrids with gasoline-power vehicles taking some market share from EVs.
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