Dick E Dauch's Entitlement Mentality

Dick Dauch, chairman and chief executive officer of American Axle & Manufacturing, lashed out Wednesday at UAW leaders for striking his company and refusing even to discuss what Dauch said was already a pattern of lower wage-and-benefit deals already reached with Dana Corp. and other direct AAM competitors.

We are fighting for the absolute survival of AAM in America," Dauch said in an interview one month after a walkout by 3,600 hourly workers at AAM plants in Michigan and New York.

"We have the flexibility to source all of our business to other locations around the world, and we have the right to do so," Dauch said, in a not-so-veiled threat. AAM has plants in Mexico, South America, Europe and Asia.

"We will not be forced into bankruptcy in order to reach a market-competitive cost structure in the United States. If we cannot compete for new contracts in the U.S., there will be no work in the original plants," Dauch said, referring to operations in Detroit, Three Rivers and in the New York towns of Tonawanda and Cheektowaga.

Don't you just love American Axle's CEO, Dick E. Dauch?

I know I love Dick E Dauch, not to be confused with his son Dick F Dauch, also an overpaid executive of American Axle. I love him because it's not every day that we’re told by a PROFITABLE company's CEO that it needs concessions of 50 to 60% from hourly workers in order to keep the jobs in the states. I especially love this line:

We will not be forced into bankruptcy

I have no idea how he thinks we aren’t all seeing that as an end game for him right now. Seriously, how is it cool for him to take a compensation package greater than his counterparts in the industry and then turn around and say that the profitable American Axle isn’t making enough money? Seriously?

He refuses to open his books or answer questions about his salary and the salaries of his top execs, but hey, no problem, we’ll just ask the hourly workers who actually PRODUCE something to take a cut equal to that of companies that were in Bankruptcy.

More from the Detroit Freepress:

But two weeks ago, UAW President Ron Gettelfinger, appearing on Paul W. Smith's WJR-AM (760) radio show, blamed the deadlock on American Axle. "As long as they come to the bargaining table with the attitude that they're not going to negotiate -- that they're going to dictate -- we're not going to get an agreement," Gettelfinger said then.

That comment didn't sit well with Dauch.

"He caused the strike," Dauch said of Gettelfinger. "I'm prepared to meet anytime. He's got plenty of time to talk on the radio ... But the message must be truthful."

>Snip<

Asked about CEO compensation, a major irritant to the UAW and other union officials, Dauch said that his own pay was decided by a committee of four independent AAM board members and was competitive with other CEOs in the industry. Last year, Dauch's base salary rose 9.6% to $1.47 million but he received no bonus, after getting a $3.9-million bonus the previous year. About $7.7 million in restricted stock options vested last year because Dauch reached retirement age, according to the firm's annual proxy statement.

>Snip<

Dauch said he understands that AAM is asking for major sacrifices by its longtime workers. It wants to cut wages from about $28 an hour to $14 per hour, slash its legacy cost burdens for retiree health care and find a way to stop paying people for not working. AAM has paid out $250 million since its inception in supplemental unemployment benefits to laid-off UAW workers, most of it in the past three or four years, said Michael Simonte, the firm's chief financial officer.

What Dauch said he does not understand is the union's apparent unwillingness to bargain a concessionary deal similar to others already blessed by the UAW for GM, Ford, Chrysler, Dana, Delphi Corp. and others.

Mr. Dauch’s unwillingness to accept any responsibility for his company is what the real problem is here. He’s asking for the same concessions made at companies in bankruptcy while American Axle is a profitable company. That profitability is based on the workers, not the CEO and his executive officers. It’s about the production and the producers. And when they don’t produce, it has staggering impacts on other parts of our economy, again from the Detroit FreePress:

The strike has forced GM to slow work or shut down at 29 factories, including eight assembly plants that mainly make pickups and SUVs. The automaker might soon have to shut down the first car plant because of the strike. A union leader in Lordstown, Ohio, where GM makes the Chevrolet Cobalt, said that plant might have to halt production next week because of the pending shortage of a brake part that American Axle indirectly supplies for that vehicle.

Mr. Dauch has received extremely favorable media attention, including this article from the Detroit Free Press. What I’d like to see more of from our media is a real understanding and explanation of the complexities that are involved in a negotiation like this and the impact on strikers.

Strikes are a last resort; an absolute last resort. So, anyone willing to go out on strike has a great deal at stake and a hell of a lot to lose. So, why can’t we talk more about what it’s like to go for 31 days without health insurance, without income, without the ability to meet basic necessities and then cross reference that to the kind of compensation package of a Mr. Dick E Dauch? Perhaps then we’d get the real picture and what is really at stake for the UAW, American Axle and everyone working for AAM. Of course, we won’t get to the bottom of this, not when Dauch thinks this way about his own employees:

"We must eliminate the Detroit entitlement mentality."

Mr. Dauch, the only one here with an “Entitlement Mentality” IS YOU.

Feel free to drop the Detroit Free Press’s writer a note about this article, I bet they'd love to hear from you.

Contact TOM WALSH at 313-223-4430 or twalsh@freepress.com. Automotive writer Jewel Gopwani contributed to this report.

I know I'd love it if they heard from you!