By Christopher Otts
Hundreds of unionized workers walked off the line on Monday at an auto parts supplier in Three Rivers, Mich. Their leverage is about 160 miles away, in Detroit: General Motors.
The work stoppage at the Dauch Corp. plant -- still commonly known by its former name, American Axle -- halts the supply of axles and axle tubes destined for GM's midsize and full-size pickup trucks. If GM's existing stockpile of the crucial parts runs out, the automaker won't be able to make some of its best-selling and most lucrative vehicles.
The situation imperils GM's heavy-duty Chevrolet Silverado and GMC Sierra pickups, as well as midsize trucks that compete for buyers with Toyota's Tacoma and Ford's Ranger.
"The loss of a key supplier such as American Axle could slow down output of GM's trucks," said Sam Fiorani, vice president at consulting firm AutoForecast Solutions. He added that because modern auto plants consume parts as soon as they arrive, "production issues will arise rather quickly."
For now, GM's truck assembly plants are running as normal, and the company said it's monitoring the situation. Josh Jager, a veteran American Axle worker who is leading the negotiations for the United Auto Workers union, said it appears GM has about two weeks' worth of axles in stock and no alternate supplier for them.
Meanwhile, American Axle is trying to keep the Michigan plant running with a "skeleton crew" of non-union contractors, Jager said.
Detroit-based Dauch Corp., which changed its name from American Axle and Manufacturing Holdings upon merging with a European auto supplier earlier this year, called the workers' decision to strike "disappointing."
"We remain committed to negotiating with the union in good faith and hope to promptly reach a fair agreement," Dauch Corp. said in a statement.
The work stoppage occurred as the UAW contract with the plant expired at midnight Monday without a new deal in place.
Workers at the plant say they are long overdue for significant raises after swallowing a roughly 50% pay cut in 2008 to keep the plant running. "We did what we had to do to stay open," said Jager, who started at the Three Rivers plant in 2002.
Regular line workers still don't earn the $29 per hour the plant paid in the mid-2000s, even before adjusting for inflation, they say.
Their goal is to raise wages to $30.50 per hour, up from the current $22, along with more generous health coverage and more vacation time, Jager said.
The spat with the United Auto Workers is as much about GM as it is about American Axle, as the supplier will likely try to pass much of the cost of increased wages for union workers to its main customer, said Warren Browne, an independent consultant to auto suppliers. He called the strike a "strategic move" to hit GM's lucrative pickup franchise.
"The UAW is telling GM, we are going to take aim at some of your most profitable vehicles," Browne said. "They're probably more people sweating at GM today than there are at American Axle."
Axles are the long, steel rods that connect the wheels and help support the weight of a truck. They are large, high-value parts with dozens of components, including ring gears and pinions, specifically made for GM's trucks -- and thus not easily substituted.
If GM wanted to relocate the American Axle factory's equipment and restart production elsewhere, the process would take months, Browne said.
One auto industry analyst, Tom Narayan of RBC Capital Markets, predicted that the strike may not last long, due to the plant's importance to GM. "GM, we expect, will step in to ensure production resumes," he said in a note to clients Monday. "We also expect there is adequate inventory to absorb lost production for a certain period."
American Axle's ties to GM run deep. The Three Rivers facility and four other driveline and forging plants in Michigan and New York were once GM-owned facilities. In the 1990s, Richard E. Dauch, a former Chrysler executive, put together an investment group to buy them, forming an independent company that supplies parts to GM and other automakers. Dauch Corp. is now one of the largest automotive suppliers in North America.
When American Axle last endured a strike in 2008, 3,650 workers from five plants in Michigan and New York also walked off the line for 87 days. The move shut down or curtailed operations at about 30 GM plants. Back then, American Axle was scrambling to cut costs and hunker down as its main customer, GM, teetered toward bankruptcy the following year.
Some of the same workers are taking part in the current strike, but say that it is happening under very different circumstances.
This time, the strike involves only the Three Rivers plant and its 970 hourly workers, as the former American Axle plants no longer have the combined leverage of operating under a single labor contract.
Today, both GM and Dauch Corp. are solidly profitable. GM has said its heavy-duty trucks remain in high demand, even as gas prices rise; the plant that builds them is moving from five days of production per week to six.
Mark Hicks won't be buying one, however. The longtime American Axle worker last bought a new truck -- a GMC Sierra -- in 2007, when he made about $29 per hour, he said.
After the 2008 agreement, his wage fell to $18. It's since climbed back to $22.
"I've had to cut back on a lot of things," Hicks, 67, told the Journal. "I can't even afford the product I'm building."
Write to Christopher Otts at christopher.otts@wsj.com
(END) Dow Jones Newswires
June 02, 2026 12:00 ET (16:00 GMT)
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