A union official said Tuesday that American Axle & Manufacturing Holdings Inc. will close the largest plant in its Detroit manufacturing complex and move production to a plant in Mexico.
Bill Alford, president of UAW Local 235, said company officials told the union the plant will close this summer, resulting in the elimination of several hundred jobs.
Alford said all of the manufacturing complex's union workers, about 1,000, be laid off for about eight weeks. When the shutdown is over, only about 230 jobs will remain.
American Axle & Manufacturing Inc. spokeswoman Renee Rogers would not say whether the plant would be shuttered. But she did say the company has been in the process of idling and consolidating parts of the manufacturing complex.
Last month, American Axle's auditors said they didn't think the company could continue as a "going concern" because of a long list of risk factors. Among the concerns: fear of bankruptcy filing by General Motors Corp., Chrysler LLC and other suppliers upon which the Detroit-based American Axle relies.
In 2008, 74 percent of American Axle's sales were to GM and 10 percent to Chrysler. The majority of the supplier's axles are for rear-wheel-drive pickups and sport utility vehicles, segments hardest hit in the current auto sales slump.
Other risk factors cited include concerns that economic conditions will continue to deteriorate, the continued tight credit market, the risk of violating loan conditions, the potential need to do more restructuring, volatility of raw material prices, pressure from customers to reduce prices and increased competition.
American Axle reported a net loss of $1.2 billion, or $23.73 per share in 2008 with sales of $2.1 billion, down 35 percent from the year before.
The Detroit-based supplier endured a grueling strike last year.
