General Motors has stepped up to the plate and is opening its purse strings to help bring the American Axel strike to a close. The number one auto manufacturer has also stopped renting by purchasing their headquarters.

Bringing Axel to an End

General Motors has agreed to help resolve the crippling strike at American Axle by paying $200 million to assist with employee buyouts and "buy-downs". The agreement to assist is predicated upon an expedited resolution to the ongoing strike called by the International UAW against American Axle.

According to GM, the assistance will "help bridge the gap" between the supplier and the UAW whose nearly 3700 employees have walking the line since February 26th. The strike has idled or hampered production at 30 GM plants, especially those producing pickup trucks and SUVs. GM saw first quarter losses of $800 million dollars due to the strike. The number one carmaker just wants to see the strike end so that they can get back to producing the cars and trucks that their customers want.

Dana Edwards, chairman of UAW Local 235 representing workers at American Axle's Detroit complex, said he hoped GM's intervention would help preserve jobs and break the logjam in the dispute, adding that the union would try to get a resolution to the strike as quickly as possible.

American Axle hopes the development will help put an end to a very costly United Auto Workers strike.

A Cool $600 Million plus Means Headquarters is Home

GM moved its headquarters from the New Center area in Mid-Town to the Renaissance Center downtown in 1996. They sank $500 million into improvements to the complex that was originally built by Ford Motor Company’s real estate arm in the early 1970s.

The “trophy” building purchase was structured under a complex real estate process called a synthetic lease. Under a synthetic lease, the company has the tax benefits of ownership, but doesn’t have the liability of listing the asset on its books.


The term of the synthetic lease expired on May 1st. The rough lending market convinced the automaker to buy the Renaissance Center outright with cash from under a sophisticated lending structure for $626 million.