American Axle CEO Richard Dauch was awarded an $8.5 million bonus for defeating the three-month strike by 3,650 auto workers and successfully imposing deep wage and benefit cuts on the company’s hourly workforce, according to a Securities and Exchange Commission filing last Friday.
In addition to the bonus Dauch received $1.5 million salary, stock awards and other compensation, which brought his total to $18.7 million in 2007, more than double his compensation in 2006. Dauch, one of the highest paid auto industry executives, has pocketed over $300 million since leading a group of private investors who took over several auto parts factories from General Motors in 1994.
Auto workers in Michigan and New York went on strike last February to oppose wage cuts of up to 50 percent. The bitter 87-day walkout was isolated and betrayed by the United Auto Workers bureaucracy, which had agreed to substantial rollbacks even before the strike began.
The new contract cut wages from $28 an hour to $14.50 and to as low as $10 an hour at the company’s Three Rivers, Michigan plant. In addition, the company is closing two plants and eliminating 2,000 of 3,650 jobs, including 1,100 in Detroit.
The board’s compensation committee—made up of fellow millionaires, including auto executives and Wall Street investors—decided to award higher bonus payments to “reward AAM’s leadership team for their accomplishments and commitment during a period of significant change in our industry and to motivate them.”
Due to the “successful resolution of our negotiations with the UAW,” the statement read, the compensation committee had scrapped its plans to give executives a 4 percent increase based on the company’s posting of a $37 million profit last year. Instead the top executives were given increases of from 44 to 200 percent.
During the course of the strike Dauch repeatedly insisted the company could not afford to pay wages of $28 an hour. He insisted that such wages were not “market competitive” and that it was necessary to eliminate “the Detroit entitlement mentality,” by which he meant the belief that workers should be able to make a decent wage and have certain benefits.
As usual the union bureaucracy came down on the side of the profiteers and left the workers out to dry. Personal opinion is that it is time for the workers, ALL workers to find new leadership.