Auto Service World
News   October 4, 2006   by Auto Service World

AAM Launches Restructuring Program


American Axle & Manufacturing Holdings, Inc. (AAM), today announced that it will offer a special attrition program to all UAW associates at AAM’s master agreement facilities in the fourth quarter of 2006.
“The unprecedented, yet necessary, structural transformation of the domestic automotive industry is continuing at a rapid pace,” said AAM Co-Founder, Chairman, & CEO Richard E. Dauch. “AAM’s special attrition program is necessary at this time to realign our workforce with actual and projected production and market conditions. The structural cost reductions anticipated as a result of this special attrition program will enhance our ability to invest in the continuing expansion of AAM’s product portfolio, served markets, customer base and global manufacturing footprint.”
AAM’s special attrition program will be offered to all UAW associates at AAM’s master agreement facilities.
AAM’s master agreement facilities are located in Detroit, Michigan; Three Rivers, Michigan; Buffalo, New York; Tonawanda, New York; and Cheektowaga, New York.
Under this special attrition program, AAM will offer a range of early retirement incentives, buy-outs and educational opportunities to its associates. These offers include:
$50,000 incentive to retirement eligible associates,
A monthly incentive for associates eligible to grow into retirement within four years,
$70,000 buy-out incentive to associates with less than 10 years seniority,
$100,000 buy-out incentive to associates with greater than or equal to 10 years seniority,
$30,000 buy-out incentive to certain associates of the Cheektowaga facility and the axle operations at the Three Rivers facility; or an educational opportunities buy-out incentive program providing benefits of two or four years for tuition and living expenses.
Associates who retire as part of this program will retain all vested pension and postretirement benefits.
Associates who accept a buy-out will retain vested pension benefits but will forfeit other postretirement benefits.
In conjunction with this special attrition program, AAM expects to initiate additional restructuring actions in 2006 to realign its production capacity and cost structure to current and projected operational and market requirements.
AAM currently expects to incur special charges of as much as $150 – $250 million for the special attrition program and other restructuring activities in 2006.
As a result of these anticipated special charges, AAM withdraws its 2006 earnings and cash flow guidance provided on June 8, 2006.
AAM is firm involved in the manufacture, engineering, design and validation of driveline and drivetrain systems and related components and modules, chassis systems and metal-formed products for light trucks, sport utility vehicles and passenger cars.
In addition to locations in the United States (in Michigan, New York and Ohio), AAM also has offices or facilities in Brazil, China, Germany, India, Japan, Luxembourg, Mexico, Poland, South Korea and the United Kingdom.


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