American Axle posts loss on strike

By Soyoung Kim

DETROIT (Reuters) - American Axle & Manufacturing Holdings Inc (AXL.N: Quote, Profile, Research) posted a steep quarterly loss on Friday as the auto parts supplier grappled with a strike by union workers and plunging sales of trucks and SUVs.

American Axle reported a loss of $644.3 million in the second quarter, or $12.49 per share, against net income of $34.6 million a year earlier, or 66 cents per share.

Revenue fell to $490.5 million from $916.5 million a year earlier.

The company was hurt by a three-month strike by its 3,650 hourly workers represented by the United Auto Workers, which ended in late May. The strike reduced its second-quarter sales by $274.9 million and its operating income by $86.6 million.

The quarterly loss also reflects $575.6 million in one-time special charges, relating to attrition programs, unemployment benefits, inventory write-downs, asset impairment among others.

Chief Executive Dick Dauch blamed the result on the "brutal combination" of the strike and steep declines in light truck and SUV production volumes, forced by a weakening economy, record gas prices and tight credit markets.

"American Axle has a comprehensive restructuring plan to transition the business to successfully adapt to new market realities," Dauch said in a statement.

The UAW ratified a new cost-cutting contract in May, ending a strike that had at least partly idled about 30 General Motors Corp (GM.N: Quote, Profile, Research) plants due to parts shortages.